Money started flooding on to the ICBC's order book as soon as it began accepting subscriptions yesterday. Sources said the lender has recorded enough subscriptions for its institutional tranche, which is earmarked for corporate investors.

The mainland's largest bank in terms of assets, loans and deposits, set an indicative price range of HK$2.56 (33 US cents) to HK$3.07 (39 US cents) per share, lower than original market estimate range.

The long-awaited offering is, however, still the world's largest public offering in fund market history.

The price for 13 billion A shares on the Shanghai market will be the same in yuan terms.

The proposed IPO price values the ICBC at around 1.9 times to 2.23 times its book value this year, compared to a 2.6 times to 2.7 times estimation the lender set when pre-marketing began two weeks ago.

"It's a massive offering at a bargain price and the participation of the dominant investment banks and influential wealthy individuals will attract a lot of interest from investors. It also has strong potential to become a major component of the Hang Seng Index," said Andes Cheng, associate director of South China Research Ltd, a Hong Kong-based research firm.

The Beijing-based bank, which started its road show yesterday, is reported to have already attracted enough orders to cover the deal's institutional order book in Hong Kong.

Various signs have shown that international investors are eagerly awaiting the ICBC's listing, looking for a way into the mainland's lucrative banking sector, which is bolstered by continuous economic growth and an increasing number of wealthy mainlanders.

The Hong Kong dollar rebounded from a multi-week low early last week, as global investors began to exchange the currency to subscribe to the ICBC shares.

Hong Kong-traded shares in other mainland lenders all dropped yesterday, as "people cleared their stock for the ICBC," said Cheng.

However, "there is still a long way to go before the ICBC and other mainland banks make the necessary reforms and become heavyweight international players in the world banking industry, such as HSBC," added Cheng.

"The bank has, over the years, accumulated some problems such as relatively poor risk management. And these issues won't be solved immediately right after the offering."

Under the terms of the deal, the ICBC can increase the Hong Kong share offer, depending on share buyers' demand, to 40.7 billion H shares, with the Shanghai allotment similarly rising to 14.95 billion A shares.

The bank could raise about US$18 to US$21 billion in its dual-listing, and is likely to overtake previous record breaking IPO profits of US$18.4 billion, made by Japanese mobile phone operator NTT DoCoMo in 1998.

The ICBC is the third of China's "big four" banks to list cross border after China Construction Bank, which floated in Hong Kong last year, and Bank of China, which listed in Hong Kong in June and Shanghai in July.

The bank plans to sell 35.4 billion H shares, or 10.8 per cent of its enlarged share capital, in Hong Kong and another 13 billion A shares, or 4 per cent of its enlarged share capital, in Shanghai, making it the first ever company to launch a public offering in two markets simultaneously.

It started taking orders from institutional investors yesterday and will open the tranche for retail subscribers on October 16. The IPO price will be fixed on October 17, and the marketing debut is scheduled for October 27.

(China Daily 10/10/2006 page10)

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