China’s PSBC makes tepid debut on Hong Kong bourse

HONG KONG: Postal Savings Bank of China ( PSBC) made a low-key debut on the Hong Kong bourse yesterday, despite notching up the world’s biggest IPO in two years aimed at expanding the business.

China’s fifth- biggest lender raked in a colossal US$ 7.4 billion in the flotation, with a report in the Chinese language financial news portal Caixin saying a fund linked to investment guru George Soros was among the initial investors.

But the firm’s first day of trading saw it post a tepid rise in the morning session with analysts saying the muted response was expected, due to the glut of options in Chinese banking.

“We have already got a lot of Chinese banks in the market. The ones (already) publicly traded are cheaper,” said Jackson Wong, associate director of Hong Kongbased Simsen Financial group.

Because of this, he said there was a ‘ limited upside’ for newlylisted Chinese banks.

Selling pressure would also be low, as investors tended to hold Chinese bank shares long-term, he added.

The company was at HK$ 4.77 by the break, from its HK$ 4.76 listing price.

However, it was outperforming the wider Hang Seng Index, which was down 0.64 per cent.

PSBC’s huge initial public offering was the biggest since Chinese internet giant Alibaba floted in New York in 2014, which raised US$ 25 billion, although it was below its targeted US$ 8.1 billion.

PSBC chairman Li Guohua described the launch as ‘successful’ and an ‘important milestone’ for the company.

“The successful public listing... clearly shows the intrinsic values of Postal Savings Bank are broadly endorsed by investors,” he said at the stock’s launch ceremony in Hong Kong’s Central financial district.

Charles Li, chief executive of the city’s exchange, who also took part in the ceremony, said cornerstone investors are ‘no better or worse’ than any others.

“Obviously in any market we hope everybody will be buying... ( but) we respect the market,” he told reporters. — AFP