The weakest of China’s big state-controlled banks has posted the weakest debut performance of any Chinese bank on its first day of trading in Shanghai today.
Agricultural Bank of China’s shares opened up around 1 per cent on their debut Thursday after the bank completed what is expected to be the world’s largest ever initial public offering, raising as much as $22.1bn.
But in the morning session, AgBank’s shares traded perilously close to their issue price of Rmb2.68, bouncing around in a tight band between Rmb2.70 and Rmb2.72.
AgBank is the last of China’s large banks to go public and it is doing so amidst weak market sentiment and at a time when many analysts are questioning the asset quality at China’s state-controlled lenders.
The situation is very different from 2006 and 2007 when AgBank’s stronger competitors were all taken to market.
On its trading debut in Shanghai in 2006, Industrial and Commercial Bank of China, now the world’s largest lender by market value, managed to rise only 5 per cent but Bank of China rose 23 per cent on its first day while China Construction Bank jumped 32 per cent and Bank of Communications managed a whopping 71 per cent increase on its Shanghai debut.
On Thursday a plaintive note could be heard in the voices of the institutional investors appearing on CNBC and Chinese financial programmes extolling the virtues of the giant rural-focused bank.
But as the morning wore on it was clear everyone was looking forward to the end of trading. Friday though will bring the stock’s Hong Kong debut.
Stefan Wagstyl
Josh Noble
Rob Minto
Pan Kwan Yuk
Jonathan Wheatley
Heba Saleh