Agricultural Bank of China's A shares crashed below the initial public offering price yesterday, two months after the lender made its trading debut on the Shanghai Stock Exchange.
The woeful share performance is a new blow to the worst-performing lender among the mainland's Big Four after the much-hyped world's largest IPO in a dual Shanghai-Hong Kong listing in July.
Agricultural Bank's yuan-denominated shares dropped five fen, or 1.87 per cent, to 2.63 yuan (HK$3.03) yesterday as investors worried Beijing would raise deposit rates, narrowing the lenders' net interest margin.
The bank sold A shares at 2.68 yuan each during the IPO. Analysts had then warned the price was too high.
The IPO proved successful as institutional investors felt obligated to subscribe to it while retail investors were convinced that government support would ensure a rosy trading debut for Agricultural Bank.
Agricultural Bank's A shares rose a scant 0.75 per cent in a lacklustre debut on July 15, the smallest first-day gain among the mainland's largest four banks. Yesterday, the shares were trading at a 20 per cent discount to their H-share counterpart, which closed at HK$3.79.
'It's hardly a surprise that the shares fell below the IPO price,' Haitong Securities analyst She Minhua said. 'Investors are awfully worried about the bank's asset quality.'