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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (1687)	12/4/2003 1:11:08 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Eager investors snapping up Chinese shares China Life IPO hits US$4.5B Jason Chow Financial Post, with files from Bloomberg News Thursday, December 04, 2003 The development of stock markets in China took a great leap forward yesterday as reports from insiders show that the initial public offering for China Life Insurance Co. garnered US$4.5-billion, 50% more than expected, and as the country's second-largest bank announced plans to sell shares in 2005. Unloading stakes in state-owned financial companies is the latest stage in the decade-long sale of Chinese government-owned assets, which so far have reaped about US$50-billion. The most recent sale has been met with an enthusiastic response. The China Life IPO, set to be the largest in the world this year, has raised US$1.5-billion more than anticipated. China Life started offering US$3-billion of stock on Monday and plans to set the price on Dec. 12. Individual investors had ordered more than US$1-billion of the shares by Tuesday, while institutional investors have ordered US$3.5-billion, according to sources close to the company. "People want to make sure they get shares," said Andy Mantel, managing director of Pacific Sun Investment Management, who also plans to order shares. "Everyone wants a piece of China." The offer easily overtakes YellGroup PLC as the largest in the world this year. Yell, which publishes U.K.'s Yellow Pages phone directories, sold US$2.1-billion worth of stock earlier this year. Meanwhile, China took another step forward on its privatization plan as state-owned Bank of China, China's second-largest lender, announced it would begin selling shares to the public for the first time in 2005. China's banking sector has been beset by bad loans that analysts say total about US$500-billion. The government estimates 21.3% of loans at the four biggest banks are non-performing, due in large part to the banks lending money to unprofitable sate-owned enterprises during the hard-line Communist years. To compare, HSBC Holding PLC, which owns Hong Kong's biggest bank, had a bad-loan ratio of 2.92% at the end of 2002. The government hopes the sale of assets can raise funds to reduce the bad loans and inject capital back into the industry. On Monday, a government banking commission outlined a pilot program in which it would fast-track one or two of the nation's top banks into steady financial ground and ready for selling shares to the public. Bank of China wants to be one of the banks the regulator puts in its pilot program. Its CEO, Xiao Gang, said it plans to sell shares in itself rather than create a separate bank that carries the best assets. China Life, on the other hand, was a separate company formed by its parent in June with the safest assets. But competition is fierce: China Life has lost market share in the major markets of Beijing and Shanghai. Moreover, the government is set to allow foreign insurers to sell policies in more parts of the country next year. jchow@nationalpost.com nationalpost.com