Agricultural Bank of China's initial public offering, which opened for subscription yesterday, may not have drummed up an overwhelming response from retail investors, but it has attracted strong interest from institutional investors. The worst-performing commercial bank among the country's Big Four - Industrial and Commercial Bank of China, Bank of China and China Construction Bank Corp - Agricultural Bank will raise US$18.89 billion from selling H and A shares if they are priced at the midpoint of the range, data provider Dealogic said. The international tranche of the offering, which constitutes about 90 per cent of the share sale, was more than 10 times oversubscribed by institutional investors, people familiar with the offer said. Victoria Mio, a senior portfolio manager and fund manager at Robeco Chinese Equities Fund, is among the institutional investors placing an order for the shares. 'We have taken into our consideration the recent fragile market sentiment,' Mio said. 'We believe the impact on banks is not going to be too bad.' The 25 per cent valuation discount to ICBC and CCB offered compensation for Agricultural Bank's lower profitability and asset quality and lack of track record, she said. 'After last year's restructuring, there's room for improvement in aspects such as credit costs and net interest margin this year,' she said. 'If the bank can deliver on these improvements, it will give investors a confidence boost after the listing.' Standard Chartered Bank, which recently signed an agreement to work with Agricultural Bank, is one of the 11 corporate investors in the offering, buying US$500 million worth of shares. It said Agricultural Bank 'has unique strong positions in both urban and county areas'. But the reception from retail investors is below expectations, according to brokers who started to offer pre-IPO booking for margin financing last week. Reuters reported yesterday that a group of investors queued up at HSBC's Kwun Tong branch to pick up listing documents. '[Agricultural Bank is] certainly not as well received as ICBC and CCB because it's not as good when you compare the fundamentals,' said Alvin Cheung, an associate director at Prudential Brokerage. 'We reckon the pricing is too high.' Cheung believes more orders may come in next week.