With equity markets crumbling world-wide, the Bank of China could hardly have chosen a worse moment to launch the IPO of its Hong Kong subsidiary, Bank of China (Hong Kong), but book-building is proceeding reasonably successfully according to reports from the issue's sponsors.
The company is offering up to HK$25bn of shares in a cautiously-priced range of HK$6.93 to HK$9.50, well below its expectations just a few weeks ago, and it may be forced to strike a price towards the bottom end of the range even so.
Market reports suggest that the institutional section of the offering (an initial 90%) is about two times subscribed, with $8 a share seen as the highest price on offer for many funds. The retail section, initially 10% but up to 30% or even higher after claw-back, closed on Thursday, with sponsors hoping that the discount of 5% will have attracted enough buyers to tighten up the institutional offering.
The final strike price will be announced on July 23rd.
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