China’s biggest bank sets for world-record IPO

BEIJING – China’s biggest bank, Industrial & Commercial Bank of China Ltd., said Wednesday it will debut October 27 on stock exchanges in Hong Kong and Shanghai in what looks to be the world’s biggest initial public offering ever.

A prospectus issued by the bank said it would decide the pricing of shares on Monday, October 23, and list them on exchanges the following Friday. It will be the first time a Chinese company has debuted simultaneously on two stock markets.Earlier news reports said ICBC hopes to raise up to US$19 billion.That would break the IPO record of US$18,4 billion set in 1998 by Japanese mobile phone company NTT DoCoMo Inc.ICBC said last week it plans to sell IPO shares worth US$3,5 billion to strategic investors.They include government investment agencies from Kuwait, Qatar and Singapore.Wednesday’s announcement came a day after the Chinese securities agency said it had approved the listing of ICBC, which reported assets of 6,5 trillion yuan (US$800 billion) as of the end of 2005.ICBC will be the third of China’s “big four” state-owned commercial banks to sell shares to investors abroad.Hong Kong is Chinese territory but it has its own financial system and mainland regulators treat it as a foreign market.China’s banks are raising money to modernise as Beijing prepares to meet a December deadline for fully opening their market to foreign competitors under its World Trade Organisation commitments.ICBC plans to issue 13 billion A shares priced in Chinese currency in Shanghai and 35,39 billion H shares, or stocks for a mainland Chinese-registered company listed in Hong Kong, the prospectus said.That is equal to 14,8 per cent of its share capital.The prospectus didn’t give a price range but said the shares would be priced at the same level, meaning about three-quarters of the money raised would come from Hong Kong.If investor demand is especially high, the issue could be increased to 14,95 billion “A” shares and 40,70 billion “H” shares, or 16,7 per cent of total capital, the prospectus said.The country’s second-biggest lender, Bank of China, raised US$11,2 billion in May with an IPO in Hong Kong that was the world’s fourth largest on record.No.3 China Construction Bank raised US$8 billion in October 2005.Nampa-APIt will be the first time a Chinese company has debuted simultaneously on two stock markets.Earlier news reports said ICBC hopes to raise up to US$19 billion.That would break the IPO record of US$18,4 billion set in 1998 by Japanese mobile phone company NTT DoCoMo Inc.ICBC said last week it plans to sell IPO shares worth US$3,5 billion to strategic investors.They include government investment agencies from Kuwait, Qatar and Singapore.Wednesday’s announcement came a day after the Chinese securities agency said it had approved the listing of ICBC, which reported assets of 6,5 trillion yuan (US$800 billion) as of the end of 2005.ICBC will be the third of China’s “big four” state-owned commercial banks to sell shares to investors abroad.Hong Kong is Chinese territory but it has its own financial system and mainland regulators treat it as a foreign market.China’s banks are raising money to modernise as Beijing prepares to meet a December deadline for fully opening their market to foreign competitors under its World Trade Organisation commitments.ICBC plans to issue 13 billion A shares priced in Chinese currency in Shanghai and 35,39 billion H shares, or stocks for a mainland Chinese-registered company listed in Hong Kong, the prospectus said.That is equal to 14,8 per cent of its share capital.The prospectus didn’t give a price range but said the shares would be priced at the same level, meaning about three-quarters of the money raised would come from Hong Kong.If investor demand is especially high, the issue could be increased to 14,95 billion “A” shares and 40,70 billion “H” shares, or 16,7 per cent of total capital, the prospectus said.The country’s second-biggest lender, Bank of China, raised US$11,2 billion in May with an IPO in Hong Kong that was the world’s fourth largest on record.No.3 China Construction Bank raised US$8 billion in October 2005.Nampa-AP