Serving Up More Banks

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China Merchants Bank (China’s sixth-largest lender) climbed by 25 percent on its US$2.4 billion listing in Hong Kong the other day (according to the FT), indicating that investors still hungry for Chinese banks.

But that was just an appetizer. The main dish will be the Industrial and Commercial Bank of China (ICBC), with a massive US$21 billion listing in Hong Kong and (importantly) Shanghai – it will be the fist Hong Kong-Mainland dual listing, and may help calm local fears that all the good stuff is going overseas. The IPO is reported to be the biggest in the world to date, and (according to Forbes) is set to be served up on 27 October.

The financial services sector took in US$10 billion in foreign investment last year (taking the total to around US$13 billion). I have also previously reported that foreign financial groups may own something like 17 percent of the Chinese banking sector by 2007. Given the current attitude to foreign investment in some quarters, there has been an ongoing debate over how much more of the banking banquet (sorry, I can’t help myself) should be open to foreign investors. But, for the moment, the foreigners are hanging on.

The FT reports that the Kuwait Investment Authority (KIA) and the Qatar Investment Authority (QIA) are both in the frame (though this was uncertain earlier in the year), as are the usual Hong Kong tycoons and some Singapore interests. They will join Goldman Sachs, American Express and Allianz, who already hold 10 percent.

So, what next for the banking sector? In an interesting turning of the tables, China Knowledge reports that HSBC and others may now (subject to some regulatory change) be eyeing listings in Shanghai.

Watch this space.

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One Response to “Serving Up More Banks”

  1. Archive » The ICBC IPO. All Part of The Plan.| China Business Blog Says:

    […] Investment, News, Corporate News It is perhaps no surprise that the recent IPO of China’s Industrial and Commercial Bank (ICBC), at US$25 billion (and possibly as much […]

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