China Construction Bank, the second largest state owned bank, priced its highly anticipated A share offering last night, at 6.45 yuan a piece, hitting the upper range of the forecast. The nine billion share sale will raise 58.05 billion yuan(USD $7.72 billion), the largest offering ever in the domestic market. Shares were 40 times oversubscribed by retail investors and 32 times by institutional investors. Analysts estimate CCB shares will fetch between 7.8 to 9.6 yuan a share in the secondary market. Its Hong Kong traded H share, which confers an equal portion of ownership, closed yesterday at HKD $6.84. (1 HKD= 0.97 yuan) In related news, Bank of Beijing, which we profiled a few day ago began trading today. The 12.50 yuan IPO shares closed at 22.68 yuan, an 80 percent pop to whoever lucky enough to get in on the offering.
Hong Kong’s monetary authority cut the region’s interest rate by half a percent today, following a similar move by the US Federal Reserve overnight as its currency is still pegged to the US dollar. Hong Kong enjoys a strong bilateral trade with Europe and the US, but in recent years, the motherland has become an increasingly dominant influence in the region’s macro economic fortune. The peg, perhaps politically expedient, as China’s renminbi is not yet freely convertible, but its economic purpose on the other hand is much less apparent these days.
Jay Sheng is Shanghaiist’s Business Editor. Email tips, news and gossip about business in Shanghai and China to biz at shanghaiist.com.