The retail section of Bank of China's IPO in Hong Kong was 70 times over-subscribed, said China's second largest bank, and the float raised a total of US$9.725 billion (HK$75.9 billion) at a price of HK$2.95 per share.
The retail tranche, was raised from 5% to 10% of the IPO through a 'clawback' mechanism. The international tranche was also 'very significantly over-subscribed' said the bank on Tuesday. The shares will begin trading tomorrow, alongside those of its Hong Kong subsidiary, which is already listed.
Several foreign institutions acquired shareholdings in BOC in the run-up to the listing, including a 5% stake by Singaporean government investment company Temasek Holdings, and a 10% stake by a consortium of US banks. There was opposition in Beijing to the Hong Kong 'H'-share flotation from domestic interests who are opposed to what they see as 'selling off the family silver'. Under the terms of its WTO accession, China is due to open up its heavily-restricted domestic banking sector next year.
The Hong Kong operations of the Bank of China were regrouped into Bank of China (Hong Kong) in 2001, and a 2002 flotation was successful, with the 90% institutional tranche being over-subscribed 4.3 times, and the 10% retail tranche being over-subscribed 24 times. 35% of the issue was allocated to retail investors, and 65% to the institutions. The 385,000 applicants receiving shares made the bank the second most widely held public company in Hong Kong, after railway operator MTRC, which has more than 400,000 shareholders.
The China Construction Bank, another of the top four mainland banks, raised US$8bn last October, and BOC is expected to be followed by the Industrial & Commercial Bank of China in 2007.
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