ICBC starts consultations on IPO pricing
By Zhang Lu (China Daily)
Updated: 2006-09-28 09:21
The Industrial and Commercial Bank of China (ICBC), the country's biggest
lender, started consultations yesterday on the pricing of its initial public
offering (IPO).
The final pricing of the shares is likely to take place
on October 23, with trading starting in Shanghai and Hong Kong on October 27,
the bank said yesterday in an announcement to the Shanghai Stock
Exchange.
Although the bank did not indicate what they IPO price may be,
analysts expect it to be between 2 and 2.6 times the lender's book
value.
"The shares will probably be priced at around 2.1 times its
predicted book value this year," said She Minhua, a banking analyst at CITIC
China Securities.
The bank has great development potential due to its
large asset scale and revenue base, said She.
Media reports said that
ICBC is in talks to buy PT Bank Halim Indonesia, in a bid to expand outside the
country to diversify its sources of income and improve
profitability.
ICBC's share offering plan was approved on Tuesday by the
China Securities Regulatory Commission, after getting the nod last week from
Hong Kong market regulators.
The bank plans to simultaneously issue 13
billion A shares in Shanghai and 35.39 billion H shares in Hong Kong, it said
yesterday.
If the over-allotment option, or green shoe option, is fully
exercised, the total number of A shares will rise to 14.95 billion and the total
H shares issued will reach 40.7 billion.
The sale is expected to be the
world's largest ever IPO, surpassing a US$18.4 billion offer in 1998 by Japan's
NTT Mobile Communications.
ICBC's IPO may raise anything between US$19
billion and US$21 billion.
The subscription period for institutional
investors in the Shanghai portion of the IPO will take place from October 16 to
19, while retail investors will able to subscribe on October 19, ICBC
said.
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