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BoCom attracts record IPO subscriptions

(Xinhua)
Updated: 2007-04-26 16:57

Bank of Communications (BoCom), China's fifth-largest lender, attracted a record 1.455 trillion yuan (US$189 billion) in subscriptions for its initial public offering (IPO), China Securities Journal reported on Thursday.

A total of 1.155 trillion yuan came from retail investors and more than 300 billion yuan from institutional and strategic investors.

The bank, in which HSBC Holdings PLC. holds 19.9 percent stake, plans to issue 3.2 billion A-shares, accounting for 6.5 percent of the expanded stock capital.

The offer was opened to subscribers on Tuesday and Wednesday and the IPO price is to be decided on Thursday. Analysts expected the price to be 7.9 yuan per share.

The bank reported net profits of 12.27 billion yuan in 2006, a sharp increase of 32.7 percent from the previous year. The value of its assets totaled 1.71 trillion yuan, up 20.8 percent, according to a report released by the bank in March.

Analysts say the huge fund reflects excessive liquidity, "a major problem for the country's economy", Standard and Poor's said in a report issued this month.

China's bullish markets, barometer of the macro-economy, have been reporting high daily turnovers averaging about 300 billion yuan.

The government has been reining in the huge trade surplus and "hot money" used to speculate on the renminbi.

BoCom, established in 1908, became China's first joint-stock commercial bank in 1987 and listed on the Hong Kong stock market in 2005.

It will be the third bank to have a dual listing in Shanghai and Hong Kong after the Industrial and Commercial Bank of China and China CITIC Bank.