BOC Offer Succeeds In Hong Kong

by Mary Swire, Tax-News.com, Hong Kong

23 July 2002

The Bank of China (Hong Kong) flotation has been successful, with the 90% institutional tranche being over-subscribed 4.3 times, and the 10% retail tranche being over-subscribed 24 times. As a result, 35% of the issue will be allocated to retail investors, and 65% to the institutions.

Retail investors in the Bank of China's listing will each get at least 500 shares costing $8.075 each, chief executive and vice-chairman Liu Jinbao announced on Friday, but the institutions will pay $8.50, at the top end of the indicative range - 60% of their bids were still valid at that price according to underwriters.

The issue has succeeded despite terrible conditions in worldwide equity markets, but Mr Liu said he was not worried about the current trading climate. "The offering was oversubscribed even during a volatile stock market worldwide last week, which has shown the public's confidence in BoC and Hong Kong's economy," he said. "The US stock market may slump, but BoC's debut trading this week will not be affected."

The 385,000 applicants receiving shares will make the bank the second most widely held public company in Hong Kong, after railway operator MTRC, which has more than 400,000 shareholders. Of the institutional investors, 46 per cent are from Asia, 33 per cent from Europe and 21 per cent from the US.

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