Hong Kong snares world’s largest IPO this year with Postal Savings Bank’s US$8.1 billion offer

Postal Savings Bank of China, that operates some-more branches in a nation than any other bank,plans to lift as most as US$8.1 billion in an initial open offer, selecting to lift collateral on a Hong Kong Stock Exchange.

The bank, handling 40,057 branches in mainland China, skeleton to sell 12.1 billion shares during an demonstrative cost operation of between HK$4.68 and HK$5.18 per share, lifting between US$7.3 and US$8.1 billion.

The volume lifted creates Postal Savings Bank a fourth-largest Chinese bank to lift capital, and places a IPO during series 25 among a list of a world’s biggest batch offers to date, according to Bloomberg data.

The Beijing-based bank is mainland China’s seventh-largest lender, with loans of 2.7 trillion yuan (HK$3.13 trillion).

Postal Savings Bank’s authority Li Guohua said during a Hong Kong press lecture that a bank will plough 10 per cent of a destiny net increase into dividends.

“Of march we’ll also take a destiny business needs into consideration,” Li said. “Our bank’s expansion intensity is high. We are assured in a destiny developments.”

Still, a offer captivated singular seductiveness from abroad investors, with few creation commitments to buy a shares, account managers in Hong Kong pronounced on Monday.

The IPO cost operation values a bank during between 0.93 and 1.02 times a approaching book value of 298.9 billion yuan for 2016, as estimated by a 6 corner sponsors, aloft than a gratefulness of a bigger competitors.

The high gratefulness is dampening seductiveness among general investors for a IPO, pronounced Sanford C Bernstein’s comparison banking researcher Wei Hou.

“For Postal, one time price-to-book is substantially a stretch, when China Construction Bank and ICBC are trade during 0.8 times,” Hou said. “These banks news aloft profits, are improved managed and are seen to be safer banks.”

China Postal Group owned 83 per cent of a bank as during a finish of 2015. Other vital domestic shareholders embody UBS AG with 4.99 per cent, China Life Insurance Co. with 4.87 per cent, and China Telecom Corp with 1.66 per cent.

Ant Financial Services Group, an associate of a South China Morning Post’s owners Alibaba Group, owns 1.08 per cent, while Tencent Holdings Ltd owns 0.19 per cent of a bank.

Among general investors, a Canada Pension Plan Investment Board owns 1.20 per cent, JPMorgan owns 0.94 per cent around a Chine investment vehicle, Singapore’s Fullerton Management owns 0.72 per cent, a International Finance Corp owns 0.69 per cent and DBS Bank Holding has a residue 0.58 per cent.

The Hong Kong Stock Exchange has been a end for 3 of a world’s 10-largest IPOs this year, according to Mergermarket’s data.

Order holding for a shares of Postal Savings Bank starts on Wednesday.

The bank will cost a offer on Sep 21 in Hong Kong after a tellurian roadshow to attract investors, and a shares will start trade in Hong Kong on Sep 28.