Financial China

ABC – a real charmer, but for how long?

  • Published 15 Jul 2010

Strenuous effort secured the Agricultural Bank of China a successful IPO that raised $19.2bn, but will investors be impressed?

From the start of the initial public offering (IPO) process, there were signs of strain. About half a month ago, when the four main underwriters were offering a price range reference for Agricultural Bank of China's (ABC) IPO price in the A-share market, none of them offered below Rmb 3 ($0.44, €0.35, £0.29) per share, and the chairman of ABC, Xiang Junbo, even said publicly during the roadshow that a price offer under Rmb 2.8 per share should be considered unacceptable. However, the final IPO price range for investors to subscribe stood between Rmb 2.52 and Rmb 2.68, and the final price closed at Rmb 2.68 per share after subscription. In contrast, its IPO price in the H-share market stood at HK$3.20 (Rmb 2.78, $0.41, €0.32, £0.27) per share, 3.66% higher than the mainland price.

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