Economy
Minsheng down in HK IPO as banks long for cash
(Agencies)
Updated: 2009-11-26 13:56
Minsheng down in debut as China banks under pressure
HONG KONG/BEIJING: Shares of China Minsheng Banking Corp, which raised $3.9 billion in the world's fifth largest initial public offering of 2009, fell 1 percent in their Hong Kong trading debut, underscoring the recently soured investor sentiment for mainland banks.
Minsheng's shares traded at HK$9.02 at 0217 GMT, compared with their IPO price of HK$9.08, which was about the mid-point of its indicated range of HK$8.50-HK$9.50. Hong Kong's benchmark Hang Seng Index fell 0.44 percent.
"Considering the number of IPOs in recent weeks, Minsheng would become less attractive to investors in terms of pricing as there are a number of choices in the market," Chen said.
"The proceeds from the IPO would have a positive impact on the bank's capital adequacy ratio and cash flow over the short term," he added.
Chinese banking stocks have come under pressure recently on concerns of potential cash calls by the sector on expectations the government may hike larger state lenders' capital adequacy ratios or reserve requirements next year after a lending boom.
Minsheng's capital adequacy ratio is rising to 12 percent after the Hong Kong IPO from 8.57 percent as of the end of September, the bank said earlier.
Minsheng, already listed in Shanghai, was China's first non-state lender to list in Hong Kong. The government or state-owned enterprises are the controlling shareholders for most of China's listed banks, but Minsheng has almost no government holding.
Minsheng's Shanghai stock traded at 8.2 yuan ($1.2), about 1.5 percent lower from its closing price on Wednesday.
Minsheng, which became the seventh mainland bank listed in Hong Kong, sold 3.32 billion shares, or 15 percent of its enlarged share capital, and plans to use its IPO proceeds to strengthen its capital base and grow its business.
