Bank of Beijing rises 81pc on trading debut
Shares of Bank of Beijing soared 81 per cent on their trading debut yesterday, boosted by mainland investors' increasing attraction to the banking sector.
The country's third city commercial bank to go public closed in Shanghai at 22.68 yuan, up 10.18 yuan from the initial public offering price. A total of 461 million shares changed hands on turnover of 10.93 billion yuan.
'The market performance was in line with expectations,' said China Securities analyst She Minhua.
'After all, the valuation of the whole banking sector is high now,' he said.
Analysts said investors bought heavily into the bank, believing it would receive a boost from the 2008 Beijing Olympics.
Yesterday's close represented 66 times of the bank's earnings for last year and 51 times projected earnings for this year.
Mainland-listed banks now trade at an average of 50 times last year's earnings. The valuations are now roughly twice those of the banks' peers on the global markets. Citi's price-earnings ratio is 11 times, according to Bloomberg.
On July 19, the country's first two listed city commercial lenders also chalked up substantial gains on their simultaneous trading debuts.
Shenzhen-traded Bank of Ningbo surged 140.5 per cent to 22.13 yuan, while Shanghai-listed Bank of Nanjing advanced 72.2 per cent to 18.94 yuan.
Bank of Beijing's 15 billion yuan initial offering drew 1.9 trillion yuan of subscriptions last week, making it 128 times covered.
The total upfront payment beat a previous record of 1.63 trillion yuan set by Cosco Holdings in June.
On Tuesday, China Construction Bank rewrote the record, reporting a combined 2.26 trillion yuan of subscriptions.
The lender, now 16 per cent owned by ING Groep after the IPO dilution, posted a net profit of 2.1 billion yuan last year, up 27 per cent from 2005.
