A feeding frenzy was prompted in Hong Kong yesterday over Industrial and Commercial Bank of China's initial public offering, which is set to be the world's largest listing and which has exceeded the $175 billion (€140 billion) record for institutional orders set by Bank of China's IPO this year.
The territory's often elderly retail punters queued outside banks for copies of ICBC's prospectus, snapping up more than 1.2 million subscription forms.
"I'm investing because the share price will go up," said a Hong Kong professional who will put down $12,800 of his own money and borrow $115,400 to subscribe, but reckons that he will be lucky if he is allotted shares worth $2,600.
"There seems to be a whole rush for Chinese banking shares these days," he said.
Although queues are common in a city where red-hot IPOs often take on a momentum of their own, they were striking for a lumbering commercial bank that less than two years ago had a non-performing loan ratio of more than 27 per cent.
That ratio has since come down to 5.5 per cent, thanks to a series of large capital injections and state-supported disposals, according to ICBC's prospectus.
Five per cent of ICBC's Hong Kong offering has been reserved for individual investors, although their share will be increased to 20 per cent if the original retail tranche is more than 100 times subscribed.
ICBC could raise up to $16 billion in Hong Kong and $5.8 billion in Shanghai if "greenshoes" (which allow more shares to be sold than originally planned when demand is especially strong) are exercised.
The present record for an IPO is held by NTT DoCoMo, which raised $18.4 billion in 1998.
