Thousands Mob Banks for ICBC Share Offering in Hong Kong

Posted 16 October 2006 @ 08:20 am EET     Print     Reprint     E-Mail     Comments

HONG KONG (AP) - Thousands of people across Hong Kong have flocked to banks in a rush to buy into what could be the world's largest initial public offering (IPO) from Industrial and Commercial Bank of China (ICBC).

By early morning, over two hundred people were queuing hours before the banks' opening in the industrial Kwun Tong area in Kowloon district on the first day of the float's retail launch.

Three million application forms have been published for the IPO, in which China's largest lender may raise more than 20 billion dollars, trumping the 18.4 billion dollar offer by Japanese mobile phone operator NTT DoCoMo in 1998. "This is the focus the world. I cannot miss it. Everyone is applying for it. You can't possibly lose money here.

It's like (global banking giant) HSBC, you never lose if you put money in that bank," said 45-year-old architect Michael Cheung. China's sizzling economic growth and the overhaul of its banking sector has fuelled a huge international appetite for ICBC, which on October 27 will become the latest in a recent crop of Chinese lenders to list on overseas exchanges.

Bank of China listed in Hong Kong in June, and then in Shanghai in July, while smaller banks such as China Merchants Bank held its IPO last month in the former British colony. ICBC, which has some 800 billion dollars in assets, has set a price of 2.56-3.07 Hong Kong dollars (33-39 US cents) for its offer in Hong Kong of 35.4 billion H-shares, which could be raised to 40.7 billion H-shares. It will sell another 13 billion A-shares in Shanghai at the same price, but could up the number to 14.95 billion if it uses an over-allotment option.

The institutional portion of the H-share offer begun last week, while the A-share institutional portion has opened Monday. The retail portion of the A-share offering will open on October 19. The lender is the third of China's big four banks to list offshore after China Construction Bank, which floated in Hong Kong last year.