China Merchants Bank makes strong trading debut

25 September 2006

China Merchants Bank made a stronger-than-expected debut on the Hong Kong stock market on Friday.

The bank's stock opened at HK$10.88 and closed at HK$10.68, with both private and institutional investors snapping up shares.

The mainland lender's gains were underpinned by its reputation for being a better managed institution than its bigger Chinese rivals, and for its healthy record for growth.

The bank offered 2.2 billion shares at HK$8.55 each in the Hong Kong IPO, raising the equivalent of around US$2.4 billion.

"Initially, I projected a low double-digit gain on its debut. But investor support, mainly from institutions, proved to be stronger than expected, and this explains its strong gains," said Howard Gorges, vice chairman at South China Securities.

"The market continued to have a good run, as reflected by heavy turnover today and yesterday," he told XFN-ASIA.

Meanwhile, Industrial & Commercial Bank of China has gained approval to list in Hong Kong, with a $19 billion initial public offering planned to take place simultaneously in Hong Kong and Shanghai in late October.

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