Agricultural Bank of China shares jump 2.2 per cent on market debut

Jul 15, 2010, 4:21 GMT

Beijing - Shares in the Agricultural Bank of China jumped 2.24 per cent on their debut on China's main stock market Thursday as part of what could become the world's largest initial public offering (IPO).

The bank's shares in Shanghai opened at 2.74 yuan (41 US cents), up from 2.68 yuan in its IPO of 2.5 billion shares but a smaller rise than the 5-per-cent-plus expected by many market analysts.

The weaker-than-expected debut might influence the bank's decision on whether to exercise an option to sell additional shares under provisions for oversubscription.

Exercising the oversubscription options could push the total value of its dual listing in Shanghai and Hong Kong above the world record 21.9 billion dollars raised by the Industrial and Commercial Bank of China in October 2006.

The Agricultural Bank of China's IPO is set to raise about 19.3 billion dollars from the dual listing without the oversubscription options, rising to 22.1 billion dollars if it sells additional shares in both Hong Kong and Shanghai.

The bank said Thursday that the oversubscription options had not been exercised so far.

Some 10.3 billion of the bank's 22.2 billion new shares were listed for trading in Shanghai from Thursday. The remaining 12 billion shares are subject to lock-up periods from three to 18 months.

The bank offered 25.4 billion shares at 3.20 Hong Kong dollars each (41 US cents) in Hong Kong, where the shares are to be listed from Friday.

It is the last of China's 'big four' state-owned banks to list in Shanghai and Hong Kong, following the lead of the Industrial and Commercial Bank of China, the China Construction Bank and the Bank of China.