HONG KONG: The mainland's third-largest bank China Construction Bank (CCB) made a flat trading debut yesterday with its share price ending at HK$2.35 (30 US cents), unchanged.

The sluggish market environment sweeping Hong Kong has been blamed for the lack-lustre performance of the lender, which raised US$8 billion in its initial public offering (IPO) last week, the world's largest in the past four years.

The stock, one of the most active stocks on the Hong Kong fund market, rose by 1.06 per cent from HK$2.35 to HK$2.375 at midday, but slipped down to the starting price later.

A total of 3.367 billion shares changed hands, involving HK$8.58 billion (US$110 million).

CCB's shares were up roughly 1 per cent in the grey market before they started trading on the Hong Kong Stock Exchange yesterday.

"October is traditionally off season for Hong Kong's stock market," said Andrew To, executive director at Tai Fook Securities, adding that this partly explains CCB's sluggish debut.

The Hang Seng Index has lost 6.7 per cent so far this month.

Additionally, CCB's IPO price is a little bit high for shareholders to make a quick sale of shares.

"If it was priced around HK$2.23, the situation would be better," said To.

As for the long-term performance, CCB has the potential to be an investment-favourite and market mover, To said.

"The Market will warm up in November and December," he said.

"At that time, I think the CCB share price could rise to HK$2.6," To added, who personally gave a "buy" rating on the stock.

Present at the listing ceremony yesterday morning, CCB's management also expressed confidence that the stock would pick up in the future.

"We don't expect a sharp jump on the first day," said Guo Shuqing, chairman of CCB. "But I believe our group has good prospects.

As the Chinese mainland's first State-owned bank to be listed overseas, CCB raised US$8 billion in the world's largest initial public offering in four years, after it priced its shares at HK$2.35 apiece.

The bank sold 26.486 billion H shares through the global offering.

Its institutional tranche was 9 times subscribed while retail portion was 42 times subscribed.

Its IPO was sponsored by Morgan Stanley, China International Capital Corp and Credit Suisse First Boston.

CCB this year has attracted about US$5.5 billion from Bank of America and Singapore Government investment agency Temasek Holdings, which hold respective stakes of 8.67 per cent and 6 per cent.

The lender has a biggest banking network on the mainland with its 14,250 branches. It has a nationwide base of approximately 68,000 corporate loan and discounted bill customers, and approximately 146 million active personal deposit accounts.

CCB provides a comprehensive range of commercial banking products and services such as corporate banking, personal banking and treasury operations.

It is considered one of the largest lenders of infrastructure loans among domestic commercial banks, with a 27.7 per cent market share.

(China Daily 10/28/2005 page9)