China Everbright Bank Co Ltd fell in its Hong Kong debut on Friday, as renewed cash crunch fears about China's banking system exacerbated weak sentiment towards a mid-sized lender that has taken three attempts to come to market.
Everbright , which raised $3 billion in its IPO, is the latest in a raft of banks rushing to tap investors to meet more stringent capital rules, and which have seen profits shrink and unpaid debts climb amid slower economic growth.
While other China bank IPOs have also been lackluster, Everbright's listing has been particularly unsung, with cornerstone investors accounting for about 60 percent of the offer - more than double the normal level - as underwriters sought to lock in as much institutional demand as possible.
Everbright, which is also listed in Shanghai, also had the misfortune to debut amid a spike in interbank rates. China's benchmark money market rate climbed to a six-month high on Friday despite attempts by the central bank to calm sentiment, with signs of a scramble for cash reminiscent of a massive crunch that occurred in June.
Although China stock markets have shown a more measured response than in June, some anxiety has set in and shares in Everbright dropped to HK$3.87, or 3 percent below its IPO price, which was near the bottom of its indicated range.
Source: Reuters
