Bank of China, China's second-largest lender, was set to
begin trading Wednesday on the Shanghai Stock Exchange following a nearly 20
billion yuan (US$2.5 billion) initial public offering - the biggest ever for a
mainland market.
Regulators have said they expect the bank's listing, along with future big
IPOs by other major corporations, to help revive the bourses after years of
sluggish trading.
Bank of China's shares were priced
at 3.08 yuan (38 U.S. cents) for the IPO. Analysts said the shares were
expected to begin trading in Shanghai at between 3.60 yuan-4 yuan (45 U.S.
cents-50 U.S. cents).
In May, the bank raised US$11.2 billion with a share
offering in Hong Kong, the world's fourth largest IPO ever.
Shanghai's benchmark Composite Index has gained 9 percent in the past three
weeks in anticipation of the bank's debut. It closed at 1,681.55 Tuesday, down
0.93 percent as investors sold to lock in profits, especially in bank shares.
Analysts said they expected a strong debut for the lender's shares to propel
the Shanghai Composite Index past 1,700 on Wednesday.
"We expect Bank of China's A shares will have a gain of at least 15 percent
to 20 percent from its IPO price; that may boost the Shanghai Composite Index by
50-70 points," said Wu Ang, an analyst at CITIC Securities.
China recently resumed IPOs and other share offerings after a yearlong break
for shareholding reforms. The warm reception for those offerings suggests strong
pent-up demand for new shares, analysts say.
The first company allowed to conduct an IPO after the
moratorium was construction contractor CAMC Engineering Co., whose share price
more than quadrupled to 31.97 yuan (US$4) on June 19, its first day of
trading. On Tuesday, CAMC rose 1.82 percent to 17.95 yuan (US$2.24) on the
Shenzhen Stock Exchange.
Last week, Shenzhen Coship Electronics Co.'s shares more than doubled from
their IPO price and Yunnan Salt & Chemical Industry Co., the next in line,
saw its shares gain 75 percent on the first day of trading.
Bank of China reported last week that its net profit rose 31 percent in
2005 over the year before to 27.5 billion yuan (US$3.4 billion).
Like
other state-run commercial banks, it is seeking to boost its competitiveness ahead of
the full opening of China's banking industry to foreign competition later this
year.
