China sees record-setting IPO
China Construction Bank raises $7.7 billion in public offering, according to reports.
( AP ) -- China Construction Bank Corp., the country's biggest property lender, has raised $7.7 billion in mainland China's biggest initial public offering so far, state media reported Wednesday.
The bank, which already has shares traded in Hong Kong, priced its Shanghai share offering of 9 billion shares at 6.45 yuan ($0.86) a share, according to a notice posted late Tuesday on the Web site of the Hong Kong Stock Exchange.
The shares are due to begin trading Sept. 25.
Tough times for high-profile IPOs
The IPO far exceeded the 46.6 billion yuan raised in the Shanghai tranche of a dual share offering by the Industrial and Commercial Bank of China in October 2006. That Hong Kong-Shanghai IPO raised a world record $21.9 billion.
The Construction Bank's IPO drew a record 2.26 trillion yuan ($300 billion) in subscriptions, almost 40 times the amount the bank was trying to raise.
Massive demand for shares, especially from retail investors, has helped push Shanghai's benchmark Composite Index up by more than 100 percent since the beginning of the year.
Bank of America Corp. holds an 8.5 percent stake in the Construction Bank. The U.S. lender's stake in the bank will be diluted to 8.19 percent by the Shanghai share offering, the Construction Bank said in its prospectus.
The Construction Bank was the first of China's four big state banks to stage an IPO in Hong Kong, raising $9.2 billion in October 2005. But it trailed rivals Industrial & Commercial Bank of China and the Bank of China in seeking a domestic share listing.
ICBC raised a record $21.9 billion in its October 2006 IPO held simultaneously in Hong Kong and Shanghai.
The Construction Bank bank's 9 billion new shares will account for 3.85 percent of its share capital. Of the total, 35 percent will go to institutional investors and up to 65 percent to retail investors.
The bank reported its first-half net profit rose 47.5 percent to 34.2 billion yuan ($4.5 billion) from a year earlier, thanks to higher interest and fee-based income.
Proceeds from the IPO will be used to build up the bank's cash base and upgrade services and management, the lender has said.