Shares of Chongqing Rural Commercial Bank made a lacklustre trading debut in Hong Kong yesterday, closing almost 1 per cent lower than the initial public offering price of HK$5.25.
Analysts, who were divided on the lender's earnings outlook, said the first-day decline reflected investor concerns over the bank's asset quality although the weak market was also a factor. The share's 0.95 per cent fall lagged behind the 1.33 per cent drop recorded by the Hang Seng Index yesterday.
The bank, the first mainland rural lender to go public, opened higher, hitting an intraday high of HK$5.49, up 4.6 per cent from the listing price, before retreating to as low as HK$5.06.
Chongqing Rural raised HK$11.5 billion in the share offering after setting the price in the middle of the indicative range. The listing was seen as a prelude to a series of offerings in Hong Kong by the mainland's mid-sized commercial banks.
'It is still not clear whether the bank's offering will pave the way for fast growth,' said Allen Gui, an analyst with Morgan Stanley. 'Yet, many investors took it for granted that Chinese banks, particularly the small-sized ones, would grow fast.'
Chongqing Rural reported a non-performing loan ratio of 2.99 per cent in the first half of this year, the highest among the mainland's listed banks. It was also the first bank in the country's southwest to launch an initial share sale.
The bank was the ninth mainland lender to be publicly traded in Hong Kong and is smaller than its eight rivals.
