Top Biz News

IPO sparks investor buzz

By Zhang Jin in Hong Kong and Pan Zhongming in Shenzhen (China Daily)
Updated: 2006-09-05 08:50

"The price looks attractive," he said, predicting the IPO would draw at least HK$100 billion (US$12.5 billion) worth of funds.

The bank has set a proposed price range of between HK$7.3 (93.6 US cents) and HK$8.55 (US$1.1) per share, lower than many had expected.

The current price range represents 2.2 to 2.44 times its book value, less than the average nearly 2.5 times of its Hong Kong-listed peers Bank of Communications, China Construction Bank and Bank of China.

The price is also in line with CMB's Shanghai-traded shares, which closed at 8.49 yuan (US$1.06) yesterday.

Patrick Yiu, associate director of CASH Asset Management, said investors are confident because the bank is considered by some fund managers to be the mainland's most efficient, with a strong retail banking business.

"We all know the bank it's just in our neighbouring city. We know it's doing well," said Yu.

CMB currently has 79,000 high-end customers with deposits of at least 500,000 yuan (US$62,500) each. The lender has issued 6.5 million credit cards, accounting for about 30 per cent of the mainland's credit card business.

The bank introduced a "service-oriented" management philosophy to the mainland's banking sector in the early 1990s for the first time.

It's also a mainland bank with few bad loan problems.

CMB has 467 branches in more than 30 mainland cities and keeps its loan risk under control by lending very little to "overheated" sectors such as property and automobiles.