Postal Savings Bank of China makes tepid trading debut in Shanghai as investors collectively shun banking industry
- Postal Savings Bank’s shares closed 2 per cent higher at 5.61 yuan on the first day of trading on the Shanghai Stock Exchange
- The largest Chinese bank by branch network began as a deposit-taking unit of the postal service until it was granted a banking licence in 2007
Postal Savings Bank of China (PSBC), the mainland’s biggest bank by number of branches, got off to a slow start on the Shanghai Stock Exchange on Tuesday.
Its shares opened at 5.60 yuan (US$0.80), or 1.8 per cent higher than the initial public offering price of 5.50 yuan. It eventually closed the first day of trading 2 per cent higher at 5.61 yuan.
The biggest IPO in China since 2010 had been surrounded by suspicions about its trading debut, with bearish investors expecting its shares to fall below the offering price, a rare scenario on the mainland Chinese stock market.
In China, initial public offering shares are seen as safe bets since most companies jump at least 30 per cent on the first trading day.
“A small gain [in share price] was expected,” said Ivan Li, asset manager with Shanghai-based Loyal Wealth Management.
PSBC could raise as much as 32.73 billion yuan if it exercises its greenshoe option in a secondary listing, which would make it the largest offering on the mainland Chinese stock exchanges surpassing Guotai Junan Securities’ 30 billion yuan IPO in 2015. The secondary listing followed its IPO in 2016 when the mainland’s fifth-largest bank by assets completed fundraising of US$7.3 billion in Hong Kong.