Everbright Bank Soars on Debut in Shanghai

China Everbright Bank soared on its Shanghai stock market debut Wednesday in the mainland’s second-largest initial public offering that hopes to raise 18.9 billion yuan.

China Everbright Bank soared on its Shanghai stock market debut Wednesday in the mainland’s second-largest initial public offering that hopes to raise 18.9 billion yuan.

The shares advanced to 3. 66 yuan at the p.m. close of trading from the IPO price of 3.1 yuan, representing an increase of 18.06 percent. The compares with Agricultural Bank, whose record $22.1 billion offering rose just 0.1 percent to 2.70 yuan on its first day of trading in Shanghai.

The strong performance is partly due to a favorable stock market in these days and on the other hand, the number of public shares owned by private investors is relatively small, which has also helped to guarantee the soaring debut, said Liu Jun, a banking analyst at Changjiang Securities.

But there are still possibilities for Everbright Bank to drop below the issue price, he added, “Even though the chances are quite small compared with the AgBank.”

Another researcher She Minhua with Haitong Securities said Everbright Bank is very attractive, at least in a short term under current fundamentals and market condition. Reasonable pricing, as well as glamorous results in the first half have also helped the eye-popping debut, he said, adding that the bank also plans a launch in Hong Kong.

Everbright Bank reported a profit of 6.83 billion yuan for the first half, according to data released when filing to the Shanghai Stock Exchange. Operational revenue for the same period stood at 17.31 billion yuan.

Total asset rose 19.1 percent from the year-start to1.43 trillion yuan by the end-June. The capital adequacy ratio is estimated to rise above 12 percent from the current 9.36 percent and the core capital adequacy ratio is expected to stand around 10 percent, according to She Minhua.