Industrial & Commercial Bank of China Sets New IPO Record at $19.1 Billion
Posted on Oct 20th, 2006
Steven Towns submits: Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:
Industrial & Commercial Bank of China Raises $19.1 Billion in Share Sale [Bloomberg]
Summary: Industrial & Commercial Bank of China, usually referred to as ICBC, raised an IPO record $19.1 billion with orders equaling $500 billion, or twice Citigroup's market value. ICBC is the first simultaneous offering in Hong Kong and Shanghai, and will begin trading on October 27th, at which time it could surpass Japan's Mitsubishi UFJ -- valued at $135 billion -- to become the world's 5th largest bank. ICBC said it will use the share sale to strengthen its capital base for expansion. China's Ministry of Finance and a state holding company each own 36.2% of ICBC, with a Goldman Sachs-led investor group owning 7.4%, and the IPO representing a 14.8% share. ICBC has the largest retail banking customer-base in China, servicing 153 million, compared to Russia's entire population of 143 million, as the Bloomberg journalist mentions. Shares of rival Bank of China, the second largest bank in China, have risen 15% since it completed an $11.2 billion IPO in May that was also heavily oversubscribed.
Potentially impacted stocks and ETFs:
Goldman Sachs (GS)
iShares FTSE/Xinhua China 25 Index ETF (FXI) [Offers exposure to Bank of China, Bank of Communications and China Construction Bank, for a combined ~20% of assets.]
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