 |
|
| View previous topic :: View next topic |
| Author |
Thousands mob banks for ICBC offering in Hong Kong |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
 Posted: Mon Oct 16, 2006 12:06 am Post subject: Thousands mob banks for ICBC offering in Hong Kong |
 |
|
FYI - scenes like this in HK are actually relatively common. Unless we finally know how many times this issue was oversubscribed, we won't know for sure how big of a frenzy this is:
-------------------------------------------------------------------------
Thousands mob banks for ICBC share offering in Hong Kong
HONG KONG (AFP) - Thousands of people across Hong Kong have flocked to banks in a rush to buy into what could be the world's largest initial public offering (IPO) from Industrial and Commercial Bank of China (ICBC).
By early morning, over two hundred people were queuing hours before the banks' opening in the industrial Kwun Tong area in Kowloon district on the first day of the float's retail launch.
Three million application forms have been published for the IPO, in which China's largest lender may raise more than 20 billion dollars, trumping the 18.4 billion dollar offer by Japanese mobile phone operator NTT DoCoMo in 1998.
"This is the focus the world. I cannot miss it. Everyone is applying for it. You can't possibly lose money here. It's like (global banking giant) HSBC, you never lose if you put money in that bank," said 45-year-old architect Michael Cheung.
China's sizzling economic growth and the overhaul of its banking sector has fuelled a huge international appetite for ICBC, which on October 27 will become the latest in a recent crop of Chinese lenders to list on overseas exchanges.
Bank of China listed in Hong Kong in June, and then in Shanghai in July, while smaller banks such as China Merchants Bank held its IPO last month in the former British colony.
ICBC, which has some 800 billion dollars in assets, has set a price of 2.56-3.07 Hong Kong dollars (33-39 US cents) for its offer in Hong Kong of 35.4 billion H-shares, which could be raised to 40.7 billion H-shares.
It will sell another 13 billion A-shares in Shanghai at the same price, but could up the number to 14.95 billion if it uses an over-allotment option.
The institutional portion of the H-share offer begun last week, while the A-share institutional portion has opened Monday. The retail portion of the A-share offering will open on October 19.
The lender is the third of China's big four banks to list offshore after China Construction Bank, which floated in Hong Kong last year.
ICBC will announce the pricing of its IPO on next Monday. |
|
| Back to top |
|
 |
| Author |
Thousands mob banks for ICBC offering in Hong Kong Replies |
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Wed Jun 01, 2011 2:59 pm Post subject: |
|
|
http://www.reuters.com/article/2011/06/01/china-banks-idUSL3E7H10FS20110601
"The previous clean-up was different because the government eventually got its money back from investors like you and me," said Dorris Chen, an analyst at BNP Paribas in Shanghai. "It's not sure how the government can get its money back this time."
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Mon Aug 16, 2010 9:16 am Post subject: |
|
|
Chinese efficiency has planted the seed of future inefficiency creating an educated labor pushback. Like all things in a command economy it's not the substance but the form.
http://www.nytimes.com/2010/08/16/world/asia/16china.html?_r=1&hp
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Tue Jun 29, 2010 10:22 am Post subject: |
|
|
Citi and Moody's downgraded china story last night and the europeans took it to heart being the most tied to trade. Gotta believe the AgBank IPO is what dropped the locals though.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Mon Jun 14, 2010 3:48 pm Post subject: |
|
|
Ag BANK set to test china-story:
AgBank IPO
Published: June 14 2010 09:52 | Last updated: June 14 2010 16:02
| Quote: |
Whether or not it launches the world’s biggest initial public offering, Agricultural Bank of China is long on superlatives. The humbly named lender was founded by Mao Zedong in the 1950s, boasts more customers than the US has people and its assets exceed the entire economic output of India. Now the only thing it needs is buyers.
Investors know the story. As proxies for economic growth, which China has in spades, banks are nice little earners. Unlike the west, China is – ostensibly at least – privatising rather than nationalising its lenders, while remaining ready to step in if anything goes horribly wrong. AgBank, the last of the Big Four to come to market, is shabbier than its peers, with more bad loans and an obscenely large cost/income ratio; but that only means more low-hanging fruit to pluck. The bank has produced earnings growth of about 25 per cent for years and is reckoned to generate a return on equity of more than 20 per cent this year. Slot that into the peer group and the ROE implies a price/book multiple below Industrial and Commercial Bank of China and China Construction Bank, but above Bank of China – say, 1.7-1.8 times this year’s estimated book value. But rest assured, this will be priced to go. If investors baulk (for there are plenty of red flags in China, from excessive bank lending to a collapsing property bubble) bankers stand ready to trim. |
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Mon Jun 07, 2010 7:23 am Post subject: |
|
|
The chinese "utility bank" is no longer unique:
Chinese banks
Published: June 7 2010 09:33 | Last updated: June 7 2010 12:59
| Quote: | The ATM for Chinese banks has a bad case of reflux. After coughing more than $100bn in the past five years, including a record $22bn for Industrial and Commercial Bank of China, investors are sated and not a little jaded. Agricultural Bank of China, the last – and grottiest – of the Big Four to list, has been forced to temper its lofty $30bn ambitions by a third. Bank of Communications, part-owned by HSBC, slashed its planned rights issue by a fifth to under $5bn.
About time. Sure, banks are a proxy on economic growth, which China delivers in spades. But they are also engines for that growth, which can backfire. The orgy of lending – $585bn in the first six months of the year, coincidentally identical to the government’s fiscal stimulus, on top of $1,400bn last year – will come back to haunt Chinese lenders as surely as it did their Japanese peers before. Capital adequacy ratios, depending on measurement, are not Teflon-coated, hence the wave of capital raising that kicked off last year. Provisioning, especially at newcomer AgBank, can be ropey. These are sprawling banks struggling to diversify away from bread-and-butter lending while still being called upon to mop up government bonds, however derisory the yield. Chinese banks boast a cast-iron safety net in the guise of government; but that is no longer a unique attribute.
All of which should raise question marks over the generous valuations, of around 1.5-2 times book based on the more realistic Hong Kong share prices, attached to the sector. US banks are bruised, but is a Chinese lender really worth twice a JPMorgan, for example? For all the hype and snaking queues of would-be investors that accompanied the Chinese banks’ privatisations earlier this decade, the trio have produced total returns of 5-15 per cent over the past three years, according to Bloomberg. That was during a period of rampant earnings growth. Restraint, such as it is, has come not a moment too soon. |
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Fri Mar 26, 2010 4:38 pm Post subject: |
|
|
This giant of giant banks just doesn't give a damn about the first world or acting like a bank should act. Indeed you'd call it a utility if it wasn't so busy financing the china's colonial ambitions. And check out the executive compensation:
ICBC
Published: March 25 2010 09:23 | Last updated: March 25 2010 12:23
| Quote: |
China’s champions-elect are going abroad, in oil, in mining and in car manufacturing, supported in almost all cases by state-owned banks. But the banks themselves are largely staying put. Why?
Full-year numbers from ICBC on Thursday confirmed that the world’s largest lender by market capitalisation, worth more than Citigroup and Santander combined, and with more customers than Russia and Canada have people, has firepower like no other. It remains, however, an almost wholly China play. That’s changing only gradually: ICBC is moving in on Thailand’s ACL, supplementing stakes in South African, Macanese, Indonesian and Canadian lenders. But still, assets overseas account for less than 2 per cent of interest income.....
|
http://www.ft.com/cms/s/01ddea3c-37f0-11df-9e8e-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F3%2F01ddea3c-37f0-11df-9e8e-00144feabdc0.html%3Fftcamp%3Drss&_i_referer=&ftcamp=rss
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Sat Sep 26, 2009 1:58 pm Post subject: |
|
|
Is that mountain of copper all about dollar fears? Much does now hinge on the dollar--consumers:
| Quote: | China may be garlanding the nation's bankers as “model workers”, but as every model knows, fashion can be fickle. This year's loan explosion has many fretting over a commensurate rise in bad debts. And with good reason: at 31 per cent of gross domestic product, the Rmb8,185bn of new loans pumped out between January and August is more than was seen in Japan in the late 1980s, or the US during Greenspan's bubble. We all know how those turned out.
China's riposte is that its banks are healthy. In aggregate, they are: published monthly data shows non-performing loans falling metronomically for the past five years, to 1.8 per cent at the end of June. But lean in more closely, and the pulse flickers. Sharply rising NPLs could erode already thin capital bases, especially outside the Big Four lenders. As Citigroup notes, Shanghai Pudong Development Bank and Minsheng, which number seven and eight by assets, barely meet the local minimum legal requirement of 8 per cent capital adequacy, let alone the regulator's guidance of 10 per cent.
The industry's best specimens, meanwhile, are still digesting the consequences of the last state-directed lending spree. In 1999 Industrial & Commercial Bank of China, number one by assets, sold its bad debts to state-owned Huarong Asset Management for Rmb313bn of government-guaranteed bonds in return. Some of these bonds are due later this year. Now, as China's budget deficit widens to fund its stimulus, guess what: Huarong (translation: “the prosperity of China”) may not be prosperous enough to meet those debts, even with a state guarantee. Other euphemistically-named vehicles are in a similar pickle. In the case of Cinda (“trust and development”), due to pay Rmb247bn to China Construction Bank earlier this week, the Ministry of Finance has simply extended the maturity of the bonds for a decade, with the interest unchanged at 2.25 per cent.
Blithely rolling over unpayable debts is not the hallmark of a healthy banking system. China has not got to grips with its last lending splurge, let alone this one.
|
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Fri Mar 13, 2009 8:22 am Post subject: |
|
|
Seems like only yesterday.....
| Quote: | Chinese bank loans
Published: March 12 2009 08:50 | Last updated: March 12 2009 20:31
At last: banks somewhere are doing what they are supposed to do. In China they are lending more and, under orders from the regulator, also increasing provisions against bad loans. Sensible stuff. Building a buffer against bad loans while lending and profits are growing – remarkably, they still are in China – is a good move. Non-performing loans are currently at about 2.5 per cent, compared with more than 15 per cent earlier in the decade, when the sector was restructured.
At the end of last year, regulators ratcheted up the provisioning level to 130 per cent of bad loans; that has now been lifted to 150 per cent, reports suggest. Do the sums, and that implies 3.75 per cent of all loans are at least fully covered. Some bulls go even further. As about half of all lending is fully collateralised, losses should only be expected on the other half. That doubles again the effective level of provisioning. Given that a big slew of lending is to government-sponsored projects, Chinese loan books are well protected.
Until, as western banks know, they are not. One problem is the likely inflated value of much of that collateral. Another is the definition of NPLs itself, which excludes “special mention” loans. At the end of 2007 these were about 6 per cent of all loans at the big three listed banks, roughly double the NPL rate. Include these and the extra cushion looks more threadbare. Another relates to supposedly implicit government guarantees. Old China hands already know these cannot be relied on, especially from provincial governments. A decade ago, the failure of Gitic, the investment arm of Guangdong’s government, left (mostly foreign) investors holding $4bn-plus of duff debts. Greater provisioning reduces future risks for China’s banks. Whether it is enough to keep them lending into an economy already under pressure is a different matter. |
| Quote: |
Bank of China
Published: March 24 2009 09:14 | Last updated: March 24 2009 19:42
Chinese banks are kicking off the reporting season in style. But the writing is on the wall, as demonstrated by Tuesday’s results from Bank of China, the world’s third-biggest lender by market value. While net profits rose 14 per cent to $9.4bn, fourth-quarter income was a third that of the prior quarter. Growth evaporated at the pre-tax level, illustrating the fillip of lower taxes.
Banking in China is a relatively simple business: four-fifths of revenues come from lending money at government set rates. Beijing is in stimulus mode and banks are rallying to the cause, increasing year-on-year lending by in excess of 20 per cent in January and February. But volume gains are partially offset by margin contraction, the result of lower interest rates and savers switching into higher yielding time deposits.
Bank of China’s net interest margin dropped 13 basis points to 2.63 per cent. And more loans are turning bad: credit costs doubled to $2.5bn. Since nearly one quarter of the group’s loan book is to the struggling manufacturing sector, and almost one-third of loans are unsecured, there is plenty of scope for that number to increase again this year.
So much for the home turf. Bank of China’s woes are heightened by its role as the country’s most geographically adventurous lender. That gives it a relatively large foreign currency book and exposure to structured products – and explains the $4bn impairment losses on “other assets”. The carrying value of remaining subprime and other discredited US assets is $16.3bn.
This feature largely explains Bank of China’s 30-40 per cent discount to its peers: the Hong Kong-listed shares trade just above book. The bank, one of China’s largest state-controlled commercial behemoths, is as safe as houses compared with its wobbly western peers, but its heyday is over. |
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
| Posted: Fri Nov 03, 2006 7:16 am Post subject: |
|
|
The aftermath of all the recent banking deals in China as well as the aftermath of the "buying opportunity" in the wake of the 1997 Asian Crisis. Looks like virtually all the easy money has already been made here:
------------------------------------------------------------
ICBC deal the latest coup for Asia bank investors
Fri Nov 3, 2006 5:01 AM ET
(Corrects terms of Royal Bank of Scotland's investment in Bank of China in paragraph 14)
By Brian Kelleher and Joe Giannone
HONG KONG/NEW YORK, Oct 27 (Reuters) - Goldman Sachs <GS.N>, which has a paper profit of nearly US$5 billion from its stake in Industrial & Commercial Bank of China <1398.HK>, is the latest foreign player to make huge profits from an Asian bank deal.
Buyout houses Newbridge Capital and Carlyle Group [CYL.UL] began snapping up distressed South Korean bank assets after the 1997-98 Asian financial crisis, starting a lucrative business that has spread to markets including China and Japan.
Bank of America <BAC.N>, Royal Bank of Scotland <RBS.L>, American Express <AXP.N> and Allianz <ALVG.DE> all have fat profits on their books from stakes in China's three biggest state-run lenders, which have just finished an IPO spree worth more than $42 billion.
"ICBC is the last of the whales," said David Putnam, head of Asia-Pacific investment banking for U.S. investment bank Houlihan Lokey Howard & Zukin. "The high level of investor interest represents over-demand among investors and under-supply."
ICBC shares rose as much as 18 percent on their Friday debut to HK$3.63 per share. Goldman bought about 16.5 billion shares in April for US$2.58 billion -- a stake now worth US$7.47 billion.
Goldman, which also raised US$1 billion through the sale of a stake in Accordia, a Japanese golf course business, this week, has raked in huge profits by taking stakes in companies around the world, a proprietary investment model that rivals are looking to emulate.
Merrill Lynch raised its fourth-quarter earnings forecast for Goldman by 43 percent, after estimating the firm could report more than US$1.5 billion in gains from ICBC and Accordia. The ICBC gain rivals the US$3.7 billion Goldman realised from its US$1.28 billion investment in Sumitomo Mitsui Financial Group Inc. <8316.T>, Japan's No. 3 bank.
"It's such a compelling track record Goldman has had, everyone has to look at that kind of business," said one top Asia M&A banker at another investment bank based in Hong Kong.
Allianz and American Express invested alongside Goldman and their stakes are worth US$2.9 billion and US$577 million, respectively. All investors have a three-year lockup period.
BIG PAYDAYS
Bank of America has proven an even more successful Chinese bank investor, as its US$3 billion initial stake in No. 3 lender China Construction Bank <0939.HK> is now worth US$9 billion.
"We felt there should be a financial return," BoA Chief Executive Ken Lewis told Reuters earlier this year. "So far, that looks fine although we're looking at it over the long term."
Beijing made sure that each of its three biggest state banks -- ICBC, Bank of China <3988.HK> <601988.SS> and Construction Bank -- had foreign strategic investors in place before they listed shares in Hong Kong and Shanghai.
"The subtleties sometimes get lost," said Putnam. "Everyone is focused on the headlines and the big numbers. The bottom line is China wants its banks to work properly."
An initial sum of about US$3.1 billion invested in Bank of China by a consortium led by Royal Bank of Scotland is now worth roughly US$9.1 billion, while HSBC Holdings Plc.'s <HSBA.L> <0005.HK> 19.9 percent share of Bank of Communications <3328.HK> is worth US$6.9 billion, nearly four times its original investment.
SHIFT FROM SOUTH KOREA, JAPAN
While investments in China's banking sector are made with growth in mind, previous deals in South Korea and Japan were driven by the collapse of some banking institutions.
Newbridge Capital, the Asian arm of buyout house Texas Pacific Group [TPG.UL], pocketed a US$1.13 billion profit last year when it sold its 48.6 percent investment in Korea First Bank six years after buying it for US$468 million.
Carlyle and JPMorgan <JPM.N> split US$1 billion from the sale of their combined 36.6 percent in South Korea's Koram, which Citigroup <C.N> bought for US$2.7 billion in early 2004.
In Japan, the landmark private equity cash-out was Ripplewood's re-float of Shinsei Bank <8303.T> in 2004 and a subsequent second offering last year. Ripplewood's investors have so far made back more than five times their initial $1.14 billion in Shinsei and still hold 30 percent of the lender.
(Additional reporting by Jonathan Soble in Tokyo) |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Sun Oct 22, 2006 5:26 pm Post subject: |
|
|
They put 15 billion US into this 'gem' to clean it up for foreign consumption. As is, still has 5% "non-performing".
China as a whole, corporate loan increases at almost 20%/year for each of last five and a postive yield curve--the growth is there. |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
| Posted: Fri Oct 20, 2006 8:29 am Post subject: |
|
|
Final numbers (or close to, anyway) for the ICBC offering. One in seven people in HK subscribed - attracting US$53.9 billion. The institutional book in HK was over 30 times oversubscribed - attracting US$325 billion in orders.
-----------------------------------------------------------
China's biggest bank, Industrial & Commercial Bank of China, raised $19 billion Friday in the world's biggest initial public offering, pricing its IPO at the top end of expectations, thanks to overwhelming demand.
The stock sale, the first ever for shares to list in both Hong Kong and Shanghai, surpasses the previous record, a $18.4 billion IPO by Japanese mobile phone company NTT DoCoMo Inc. in 1998.
The state-owned bank, called ICBC, priced its Hong Kong offering at 3.07 Hong Kong dollars a share, at the top end of the indicative price range of HK$2.56-HK$3.07 ($0.33-$0.39), Dow Jones Newswires reported, citing an unidentified person familiar with the deal.
At that price, the bank is raising $13.9 billion from the Hong Kong offering.
The Shanghai portion of the offering was priced at 3.11 yuan ($0.39) _ near the top of its price range of 2.60 yuan to 3.12 yuan ($0.33-$0.39), Dow Jones Newswires said. The mainland portion will raise $5.1 billion.
If the so-called greenshoe option is exercised and the bank decides to increase its offering, the entire IPO could grow to $22 billion.
ICBC will officially announce share pricing Monday.
The shares are due to begin trading simultaneously in Hong Kong and Shanghai next Friday, Oct. 27.
The greenshoe option will enable the bank to sell up to 14.95 billion A shares and 40.70 billion H shares, which would account for 16.7 percent of its total share capital.
Mainland Chinese banks have a long track record of bad debts and lending scandals, but investors have been keen to buy shares, betting that government support will limit risks while allowing them to tap into China's economic boom.
Like the two other major state banks that have already sold shares in Hong Kong, Bank of China and China Construction Bank, ICBC has restructured and wiped out billions of dollars in bad debts.
ICBC's Hong Kong offering has attracted the largest amount of orders ever from retail investors, drawing orders of more than HK$420 billion ($53.9 billion), The Standard newspaper and the Hong Kong Economic Journal said.
More than 1 million people _ or one in seven of Hong Kong's total population _ placed those orders, the Journal said.
The keen demand surpassed the record set by Bank of China, the mainland's No. 2 lender, whose IPO in June drew HK$280 billion in retail orders.
Meanwhile, the institutional book for the Hong Kong offering was more than 30 times covered, attracting around $325 billion in orders from investors, Dow Jones quoted another person familiar with the deal as saying. |
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
