Investors opt out of Postal Savings Bank listing
BEIJING/SHANGHAI: Postal Savings Bank of China said investors had opted out of paying for 3% of shares on offer in its Shanghai listing, a rare development that underscores growing concerns over problems in China’s banking system.
Worries about the health of China’s banking sector have grown this year after regulators seized control of Inner Mongolia-based Baoshang Bank in May, citing serious credit risks.
That was followed by the rescue of four other regional lenders by state and local governments, hitting investor sentiment towards the sector.
China’s biggest bank by number of branches is seeking up to 28.45 billion yuan (RM16.71 billion) in the first part of the share sale, which was 79 times oversubscribed, a low level as mainland Chinese share offerings are often thousands of times oversubscribed.
A greenshoe option of 15% of shares, which needs to be exercised within 30 days of listing, could take funds raised to US$4.7 billion.
PSBC said in a statement late on Tuesday that nearly all of those who decided not to take up allocated shares were retail investors.
Unlike other major IPO markets, in mainland China investors are not required to pay before getting an allocation. Underwriters of the share sale will pick up the unsold shares.
Dai Zhifeng, an analyst at Zhongtai Securities Co, said he saw the problem as one of general investor wariness towards banking stocks rather than a reflection of PSBC’s financial health.
Some recently listed banks are trading below their issue price, he noted.
Zheshang Bank Co Ltd has lost 8% since its Nov 27 Shanghai debut. – Reuters