The flotation of Bank of China, the world's biggest share listing for six years, is attracting a large amount of demand from retail investors, despite the recent falls in the Hong Kong stock market.

The bank will price shares in the US$9.8 billion flotation Wednesday. The shares are expected to be priced at between HK$2.50 and HK$3.00. The pricing comes after Monday's 2.6 per cent fall in Hong Kong's benchmark Hang Seng index and a 3.5 per cent drop last week.

The retail order book is set to close today. If it is more than 100 times oversubscribed, then the retail tranche will be expanded from 5 per cent to 20 per cent of the shares on offer. The total offering of shares could be expanded to $11.3 billion if there is enough demand. The shares will make their stock market debut on June 1.

Several recent flotations by Chinese firms have seen massive first-day trading gains, as institutions, disappointed by their allocations, have snapped up shares in the aftermarket in the first few days of trading.

Retail investors hope that the Bank of China flotation will be as successful as the listings of China Construction Bank and Bank of Communications, which have seen their shares rise about 44 per cent and 97 per cent respectively since listing last year.

Bank of China, which owns 66 per cent of Hong Kong¡¯s No 2 bank, BOC Hong Kong, began taking orders from institutional investors on May 11 and has attracted more than $30 billion in orders. A consortium led by Royal Bank of Scotland owns 9.6 per cent of Bank of China.

The listing is sponsored by BOC International, Goldman Sachs and UBS. The investment banks are expected to reap total fees of about $250 million.