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Last Updated: Friday, 22 September 2006, 07:48 GMT 08:48 UK
Strong debut for China Merchants
China Merchants making its debut at the Hong Kong stock exchange
China Merchants stock market listing was heavily oversubscribed
China Merchants Bank made a strong debut on the Hong Kong stock market, with its shares gaining as much as 30% on their original sale price.

The Shenzen-based lender, China's sixth-biggest bank, raised $2.4bn (1.27bn) from the share offering.

China's surging economy, which grew at 10.9% in the first half of 2006, is creating huge demand for bank services.

However, there are fears that banks have been overvalued, with questions raised over levels of bad debt.

China Merchants' shares opened at $1.39, compared with their $1.09 sale price.

Demand for the shares in the initial public offering was very strong, with retail investors asking for 266 times the number of equity on offer, while institutional investors ordered 53 times those on sale.


Two of China's biggest banks, Bank of China, and China Construction Bank, have also made successful Hong Kong stock market debuts this year.

The Industrial and Commercial Bank of China is poised for a $19bn listing in Hong Kong this October.

The initial public offering could be the world's largest since Japanese telecoms giant NTT DoCoMo's $18.4bn listing in 1998.

Chinese state-owned banks have been raising billions of dollars as the country opens the banking market to foreign competitors under its terms of joining the World Trade Organization.

Some investors, especially in the US, have flagged up concerns about a lack of transparency - especially over the bad debts on the banks' balance sheets, the results of widespread lending to uneconomic state-owned enterprises.

Chinese bank moves nearer float
14 Aug 06 |  Business
Flotation of China bank approved
19 Jul 06 |  Business
Bank of China raises more money
07 Jun 06 |  Business
Bank of China sale raises $9.7bn
24 May 06 |  Business
China bank makes HK stock debut
27 Oct 05 |  Business

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