(15 September 2016 – Hong Kong) Postal Savings Bank of China (PSBC) launched an initial public offering (IPO) in Hong Kong worth US$8.1 billion (A$10.8 billion) earlier this week.
The float values the at between US$49 billion and US$54 billion — well above the $41bn implied by a $7 billion funding round in December from a variety of investors including JPMorgan, Singapore’s Temasek, Alibaba’s payment arm – Ant Financial, and Tencent.
State-owned enterprises own a majority of the three quarters of pre-sold shares. Known as ‘cornerstones’, these investors are locked into their purchase for six months and have provided more than half the equity sold in Hong Kong in 2016.
PSBC’s cornerstones include China’s leading state shipbuilder, which at the midpoint of the price range will provide US$2.2 billion, and Shanghai International Port Group, providing US$2.1 billion.
On Tuesday the bank offered its shares at between HK$4.68 and HK$5.18, raising up to $8.1 billion before including a “greenshoe” of up to 15 percent extra shares that can be added at bankers’ discretion.
SOEs are prohibited from selling shares below their book value — making it harder to float PSBC, since its main peers are trading at just 0.8 times book value, on average, despite a sharp rally for China’s biggest four banks in recent weeks.