China Merchants Bank, the country's most profitable lender, raised HK$18.8 billion (US$2.4 billion) selling shares in Hong Kong after investors ordered 53 times more stock than was available, bankers involved in the sale said.
Shenzhen-based Merchants Bank sold 2.2 billion shares at HK$8.55 apiece, the top end of the range marketed to investors, said the bankers, who declined to be identified before the company makes an announcement.
The sale is the second overseas this year by a Chinese lender after Bank of China raised US$11.2 billion in June. Merchants Bank, led by Chief Executive Officer Ma Weihua, has the highest return on average equity - 18.9 percent - of the country's biggest banks and its earnings rose at an annual pace of 40 percent from 2000 to 2005.
"I'm not surprised they priced at the top end," said Tim Leung, who helps manage US$1 billion in Asian stocks at IG Investments Ltd in Hong Kong and subscribed to buy the shares.
"It's probably the best bank in China given its profitability ratios and sound management."
The sale comes as Beijing-based Industrial & Commercial Bank of China plans to raise as much as US$14 billion selling shares in Hong Kong and US$7 billion in Shanghai in the world's biggest initial public offering, according to people involved in the sale.
Institutional investors ordered about US$96.4 billion of Merchants Bank shares, or 49 times the amount originally offered, the bankers said. Hong Kong retail investors ordered US$32 billion, or 266 times the shares earmarked for them, the bankers said.
The company, which first sold stock in Shanghai in 2002, will start trading in Hong Kong on Friday. Shares traded in Shanghai have risen 54 percent since their last trading day of 2005, compared with a 48 percent gain in the Shanghai Composite Index. The stock was unchanged on Friday at 9.34 yuan (US$1.17).
Investors bought shares of Merchants Bank at a price equal to about 2.4 times the company's estimated book value, compared with BOC's 2.26. The share sale was arranged by China International Capital Corp, JPMorgan Chase & Co and UBS AG.
Source:佚名