CCB defends IPO price
(Xinhua)
Updated: 2006-07-16 08:44
The president of the China Construction Bank (CCB) has defended the company's
share price at its initial public offering (IPO) against claims that it was
undervalued.
Guo Shuqing told a forum on public management here on Saturday that the ratio
of the CCB's IPO share price and net asset per share is 1.96, almost the same as
the international average ratio of most modern banks.
After the IPO, its share price remained almost unchanged for half a month,
and one day it even fell below the IPO price, said Guo. .
The CCB, one of China's "big four" commercial banks, was listed on Hong Kong
Stock Exchanges (HKSE) last October, raising eight billion U.S. dollars in its
IPO, the world's largest fund collection since 2001 and a record for the HKSE.
The stock's IPO price was 2.35 Hong Kong dollars, but on May 8 this year, the
CCB's share price in Hong Kong rose by 50 percent, which was regarded by some
investors as evidence its IPO price had been set too low.
However, Guo described the jump as reasonable because the same day the total
H-share index rose 53 percent.
"Investors' confidence in China's economic prospects and the Renminbi's
appreciation potential together boosted the share price," he said.
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