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 Wednesday, 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 $7.4 billion news portal Caixin saying a fund linked to investment guru George Soros was among the initial investors.

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 Kong-based Simsen Financial group.

Because of this, he said there was a “limited upside” for newly-listed Chinese banks.

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

Shares in the company ended Wednesday’s trading at HK$4.77, from its HK$4.76 listing price, while the wider Hang Seng Index traded up 0.2 percent.

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

Li Guohua (6th R), Chairman of Postal Savings Bank of China (PSBC), stands next to Hong Kong Financial Secretary John Tsang (7th R) before the company’s listing on the city’s stock exchange in Hong Kong on Wednesday. Postal Savings Bank of China (PSBC) launched on the Hong Kong stock exchange on Wednesday, after the world’s biggest initial public offering this year.

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

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.

‘Growing business’

with 40,000 branches -- more than any other bank in the country -- and around 70 percent in rural areas.

Founded in 2007, it provides basic banking services to farmers and agricultural business owners, and it - ent in some of the country’s most remote regions.

“We intend to use the net proceeds... to strengthen our capital base to support the ongoing growth of our business.”

PSBC’s total assets reached 7.7 trillion yuan ($1.15 trillion) by March. billion yuan.

Previously completely stateowned, PSBC raised 45.1 billion yuan by selling a 16.92 percent stake to 10 strategic investors in December, valuing the firm at $40.6 billion.

In comparison, Deutsche Bank AG is worth $16 billion, Goldman Sachs is worth $69 billion and Industrial & Commercial Bank of China Ltd., China’s biggest lender, is worth $235 billion, according to Bloomberg News.

Among the buyers were e-com Financial, and Tencent, another internet behemoth.