Banking

ABC to begin road show

By Hu Yang (chinadaily.com.cn)
Updated: 2010-06-10 16:07
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Agricultural Bank of China (ABC) plans to hold its road show in Beijing, Shanghai and Shenzhen to promote its shares to A-share institution investors, starting June 17.

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Authorities gave approval Wednesday to launch an initial public offering in Shanghai and Hong Kong, the 21st Century Business Herald reported.

A person close to the bank's underwriter said that ABC has previously contacted potential institutional investors and that many large-scale fund companies have already shown interest in buying shares.

Speculation on the share price is stirred by weak market sentiment. A staff member of ABC denied a rumor that the lowest offer price will be 1.905 yuan. The number is calculated by multiplying ABC's 2009 net asset per share by a price-to-book ratio of 1.5.

But an analyst said setting an offer price is much more complicated than the above formula.

ABC plans to sell up to 22.24 billion A-shares on the Shanghai Stock Exchange and up to 25.41 billion shares in Hong Kong, excluding an over-allotment option. The IPO could possibly be the world's largest ever, surpassing a previous record of $21.9 billion set by Industrial & Commercial Bank of China in 2006.