Money

Everbright Bank shares up 18% on 1st trading day

(Agencies)
Updated: 2010-08-18 18:17

China Everbright Bank's shares rose 18.06 percent at close after their debut in Shanghai on Wednesday, a better-than-expected performance for the roughly $3 billion IPO that underlines continued interest in banking stocks.

Everbright Bank's shares opened at 3.37 yuan ($0.50) and closed at 3.66 yuan, compared with their IPO price of 3.10 yuan. The broader Shanghai index closed down 0.21 percent Wednesday, at 2,666.3 points.

Related readings:  Everbright Bank sets price range for Shanghai IPO  China Everbright seeks 3-3.3 yuan IPO price range  Everbright IPO set to shine  Everbright Bank to list in Shanghai on Aug 18

China's No 11 lender set a lower-than-expected price range of 2.85-3.10 yuan for the IPO, in which it could raise as much as 21.7 billion yuan in China's second-biggest IPO this year if it exercises a greenshoe, or over-allotment option.

The mid-sized lender sold 6.1 billion shares in the offering, which could be expanded to 7 billion shares with the over-allotment.

Everbright Bank's debut is being watched closely as a barometer of investor enthusiasm toward banking shares amid rising concerns over lenders' asset quality due to a weak real estate market and massive local government borrowings.

Everbright Bank joined rivals in tapping the stock market for fresh capital after a 2009 lending binge blew a hole in their balance sheets.

The bank's listing also marks the culmination of a three-year toil by Chairman Tang Shuangning -- also a well-known calligrapher -- to transform it from a mismanaged lender saddled with billions of dollars in bad debts to a healthy institution.

With more than 400 branches across the country, Everbright Bank is controlled by Central Huijin, the investment arm of China's $300 billion sovereign wealth fund. Hong Kong-listed China Everbright, the Beijing-based financial conglomerate, directly owns 6.4 percent of Everbright Bank, company data showed.