Ag Bank's H-shares priced between 2.88 to 3.48 HKD

16:56, June 25, 2010      

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Agricultural Bank of China (Ag Bank, ABC) officially launched the H-share road show in Hong Kong on June 24. Its H-shares were priced at between 2.88 to 3.48 Hong Kong dollars on the night of June 23, with corresponding price-to-book ratios ranging from 1.55 to 1.79.

An attendee from ICBC International said that the price range for H-shares is quite reasonable, and its price-to-book ratio is between that of the Bank of China and China Construction Bank.

Ag Bank is set to issue 47.6 billion shares altogether this time, with 22.2 billion A-shares and 25.4 billion H-shares. Roughly 95 percent of the H-shares are for international placing and the remaining 5 percent are for Hong Kong public offerings. According to schedule, the bank will offer H-shares to the public starting June 30 and ending July 6, and list in the Hong Kong Stock Exchange on July 16.

The bank's chairman of board Xiang Junbo said that Ag Bank possesses the lowest proportion of foreign currency assets among China's four major state-run banks, so the further yuan exchange rate regime reform may have little effect on the bank's business.

Guo Haoda, Ag Bank's vice president, said that its non-performing loan rate in the real estate sector stands at around 2 percent, lower than the bank's overall rate. Moreover, the stress tests required by China Banking Regulatory Commission also showed that when property prices had dropped 30 percent and the benchmark interest rate had increased by 108 basis points, Ag Bank's non-performing loan rate only rose 1 percent.

Ag Bank directly distributed 40 percent of the total H-shares to cornerstone investors, according to its H-share initial prospectus.

The funding scale of Ag Bank will be the largest among the initial public offerings in Hong Kong in 2010, but whether it will exceed the funding scale of the Industrial and Commercial Bank of China still depends on the final price.

By People's Daily Online


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