THE shares of Bank of Beijing nearly doubled on their trading debut in Shanghai yesterday amid strong buying of the third listed city commercial bank.
The shares ended at 22.68 yuan (US$3) yesterday on the Shanghai Stock Exchange, up 81.44 percent from the offer price, after topping an intraday high of 25 yuan. The benchmark Shanghai Composite Index dipped 0.55 percent yesterday to 5,395.27.
The bank's stocks opened at 23 yuan, up from its offer price of 12.50 yuan, the upper limit of its price range.
"I am quite satisfied with the opening price, and the bank will gear up to create sustainable value for investors," Yan Xiaoyan, president of Bank of Beijing, said yesterday in Shanghai.
All companies aim for an overseas listing, she said, declining to elaborate more on the bank's future plans.
She also said the smooth cooperation with ING will make a sound basis for its development.
The bank will expand its business scope and develop into non-banking business like investment banking and fund sales, Yan said.
The city bank will further step out of its capital headquarters by venturing into cities like Xi'an and Shenzhen, she said.
The bank has set up a branch in Tianjin and is now preparing for a Shanghai branch.
"I had expected the bank to debut at more than 20 yuan though I put the six-month target at 18 yuan to 20 yuan," said She Minhua, a China Securities Co analyst.
The first trading day of new shares tend to open high, especially in a bullish stock market.
Guotai Jun'an Securities Co said in a research report that it expected the bank to trade between 19 yuan to 23 yuan on the first trading day.
Guotai Jun'an expected the bank to keep rising with an annual compound growth of 32 percent in five years. The broker has forecast a 30-percent five-year annual compound growth at China Construction Bank, one of the country's big four.
Smaller banks in most cases should have a quicker growth than bigger players, because of their smaller business base.
But Qiu Zhicheng, a Haitong Securities Co analyst, said the bank's growth is too slow for a small city lender. The slow growth may put it behind peers like Bank of Ningbo.
Bank of Beijing received orders for 115.38 billion shares from retail investors. The city bank raised 15 billion yuan on its IPO in Shanghai.
The bank offered 75 percent of the total shares to individual investors, up from the previously planned 70 percent, due to the heavy retail subscription. Institutional investors took the remaining 25 percent, down from the 30 percent formerly planned.