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Ambitious price tag seen for BOC public offering

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Bank of China (Hong Kong) is believed to have presented investment bank analysts with a potential price tag of 1.8 to two times book value on the shares it will be offering to the public next month.

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That could value the group at about US$20 billion - depending on the restructured balance sheet it is due to present shortly - and pitch the newcomer to the market in direct competition with Hang Seng for the mantle of the second-biggest locally listed bank.

Some investment bankers said last night the price tag could be over-ambitious.

'It is difficult to see how it would work - even if it comes completely clean in terms of bad debts, and at a return on equity of 10 per cent to 12 per cent,' an analyst said.

The price tag was floated at a marathon all-day presentation made to analysts by the Bank of China yesterday.

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Also emphasised at the meeting, it is understood, was the urgency with which Bank of China wished to get the float under way - and analysts said this indicated that mainland policymakers wanted to clear the decks for a large number of new issues to follow in its wake.

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