Huishang debut lifts hopes for Everbright

Huishang Bank fended off negative sentiment towards city commercial lenders with a positive debut yesterday, finishing up 2 per cent and strengthening investor confidence in a series of upcoming bank listings.

The debut, the second in a week after Bank of Chongqing, was well underpinned by six cornerstone investors, including mainland property developer China Vanke and jeweller Chow Tai Fook.

Huishang pre-sold about US$639 million, or more than half of the US$1.2 billion raised, after weak pricing for the offer amid caution over the prospects of mainland banking stocks. The stock rose 2 per cent above its offer price to HK$3.60 as the market swung between gains and losses.

The Anhui-based lender also drew support from institutional investors, bankers said, after it clarified its relationship with local government financing vehicles and the off-balance-sheet activities.

Huishang's positive debut is likely to boost confidence in China Everbright Bank, which got approval from the Hong Kong stock exchange in late last month for its long-planned US$4 billion share sale. Bankers said Shanghai-listed Everbright was actively gauging market conditions for a third listing attempt in the next six months.

Bankers earlier suggested Everbright's management had requested cornerstone investors to commit at least 60 per cent of the share sale before a deal launch.