7 July, 2010 /Woori BMO Group/ According to analysts at renowned wealth management firm Woori BMO Group, one of the largest banks in China, is on the road to becoming the biggest IPO in history.
Agricultural Bank of China has raised $19.2 billion from creditors, a company that has more clients than the entire U.S. nation, according to data collected by Woori BMO Group.
The Beijing-based lender, which is preparing to list its shares on both Hong Kong and Shanghai markets, said it sold 25.4 billion shares for $0.4107 apiece in Hong Kong, bringing the total to $10.43 billion. The Shanghai stock, which stood at 22.2 billion shares, was valued at $0.3955 a share and earned about $8.78 billion.
The bank will collect more than $22 billion if the corporation decided to exercise its right to sell more shares, as is expected.
“Barring extenuating situations, this will be the world’s biggest IPO,” said Christian Harper, Director of EMEA Wealth Management at Woori BMO Group.
“The offering from the Agricultural Bank will narrowly edge fellow borrowers, China’s Industrial and Commercial Bank, which currently retains the distinction for the world’s biggest IPO by collecting $21.9 billion when it went public in 2006,” Christian added.
Currently, Visa (V, Fortune 500) retains the U.S. record since collecting nearly $18 billion in its industry launch in 2008. There is some hope that General Motors will be able to beat it when it becomes public again.
Despite worries about emerging real estate problems in China, Agricultural Bank has aspired to make a splash with investors.
While the bank does not trade on a U.S. exchange, those on Wall Street are holding a close watch on the IPO to decide whether there are any signs of cooling off in China’s economy and financial markets.
With nearly 24,000 branches and around 320 million clients, Agricultural Bank is poised to expand as both the Chinese financial sector and domestic consumers become more sophisticated.
“Investors may have to wait to see how the stock market reacts to the bid, though, because there is usually a latency between the time Chinese companies sell their securities and the first day of trade,” Andrew Williams, Director of Institutional Equity at Woori BNO Group reported.
The company’s shares are due to start trading in Shanghai on July 15. Shares in Hong Kong are expected to start a day later.