Kwong On Bank share issue proves popular
Strong demand among investors for initial public offerings has helped buoy Kwong On Bank's new share issue, which was oversubscribed by 24 times, according to sources.
The result will tie up $3.65 billion in subscription money for eight days. The bank's share price is fixed at $10 each.
The strong demand means the public portion of the offering will be increased from the original 15 million new shares to 22.5 million, representing about 30 per cent of the total new shares available. Under clawback provisions, the international placement, which was oversubscribed 20 times, would come back from 80 per cent of the issue to 70 as shares were allocated to the public portion.
Taking into account the clawback, the average oversubscription rate for the whole issue was 18.5 times.
An estimated 15 per cent of the shares in the international tranche was subscribed by Japanese investors, reflecting the influence of Kwong On's 55 per cent shareholder, Fuji Bank.
Fuji's stake will fall to slightly more than 50 per cent after the float.
Dealing in the shares was expected to begin on June 24.