(chinadaily.com.cn)
Updated: 2007-09-18 16:34

China Construction Bank (CCB), the country's second-largest commercial bank, has attracted a record 2.26 trillion yuan (US$300 billion) of subscription funds in a Shanghai initial public offering (IPO), the China Securities Journal reported.

The offering met with strong demand due to a positive outlook for the bank combined with ample liquidity, said analysts.

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The size of funds frozen for subscription exceeded the previous record set by Bank of Beijing, which attracted 1.89 trillion yuan in an offering earlier this month.

CCB, already listed in Hong Kong, plans to offer up to 9 billion yuan-denominated A shares and set an indicative range of 6.15 yuan to 6.45 yuan for the offering last Thursday. As the shares have been substantially over-subscribed, it is likely that the share price is set at the upper band of the range.

This meant it could raise up to 58.05 billion yuan in IPO and become the largest domestic offering, exceeding the Industrial and Commercial Bank of China, which raised 46.64 billion yuan last October in the domestic market in a simultaneous listing in Shanghai and Hong Kong.

The bank's earnings per share in the first half of 2007 was 0.15 yuan, compared with 0.12 yuan for the Industrial and Commercial Bank of China and Bank of China.

Its non-performing loans ratio stood at 2.95 percent at the end of June, lower than the 3.29 percent half a year ago.

The CCB shares would likely debut on the Shanghai Stock Exchange at about 30 percent higher than its H-share prices in Hong Kong, according to Changjiang Securities.

China has been encouraging more domestic share issues to increase supply of stocks and mop up excessive liquidity in its booming capital market, where the key index has surged more than 100 percent this year.

Earlier this week, the China Securities Regulatory Commission approved China's top coal producer Shenhua Energy's plan to issue up to 1.8 billion A shares, another major offer in the domestic stock market.