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China's PSBC launches biggest share sale of the year | China's PSBC launches biggest share sale of the year |
(1 day later) | |
Postal Savings Bank of China (PSBC) is looking to raise $8bn (£6bn) by listing its shares in Hong Kong, making it the world's biggest share sale this year. | Postal Savings Bank of China (PSBC) is looking to raise $8bn (£6bn) by listing its shares in Hong Kong, making it the world's biggest share sale this year. |
PSBC is China's fifth largest lender, but the biggest by number of branches. | PSBC is China's fifth largest lender, but the biggest by number of branches. |
It is undertaking the largest stock market listing since Chinese online retailer Alibaba raised $25bn in New York in 2014. | |
Shares in PSBC are due to start trading on the Hong Kong Stock Exchange on 28 September. | |
The majority of shares in the state-owned bank will be bought by so-called cornerstone investors, suggesting weak demand from traders. | The majority of shares in the state-owned bank will be bought by so-called cornerstone investors, suggesting weak demand from traders. |
Cornerstone investors subscribe ahead of the stock market listing to buy a certain number of shares and in return agree to hold them for a minimum period of time. | Cornerstone investors subscribe ahead of the stock market listing to buy a certain number of shares and in return agree to hold them for a minimum period of time. |
While initially used to draw in big investors, cornerstones are now largely seen as a way of limiting the risk that the listing might fail. | While initially used to draw in big investors, cornerstones are now largely seen as a way of limiting the risk that the listing might fail. |
In the case of PSBC, a group of six cornerstone investors will buy about 72% of the shares on offer. | In the case of PSBC, a group of six cornerstone investors will buy about 72% of the shares on offer. |
Market volatility | Market volatility |
The share listing comes as the region sees a hefty drop in share sales, with the first half of 2016 the weakest period since 2008. | The share listing comes as the region sees a hefty drop in share sales, with the first half of 2016 the weakest period since 2008. |
Stock listings in Asia Pacific have been affected by recent market volatility, which has affected trust in shares as investment. | Stock listings in Asia Pacific have been affected by recent market volatility, which has affected trust in shares as investment. |
Analysts say the share sale will help PSBC raise funds at a time when China's economy is slowing and bad loans are rising. | Analysts say the share sale will help PSBC raise funds at a time when China's economy is slowing and bad loans are rising. |
China's slowing growth, as well as global uncertainty over the US election and the UK leaving the European Union, has also contributed to an uncertain climate for investors. | China's slowing growth, as well as global uncertainty over the US election and the UK leaving the European Union, has also contributed to an uncertain climate for investors. |
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