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China's biggest bank sets Oct. 27 for Hong Kong-Shanghai stock market debut

China's biggest bank sets Oct. 27 for Hong Kong-Shanghai stock market debut

China's biggest bank, Industrial & Commercial Bank of China, said Wednesday it will debut Oct. 27 on stock exchanges in Hong Kong and Shanghai in what looks to be the world's biggest initial public offering ever.
The bank, in a prospectus published in a government financial newspaper, said it would decide the pricing of shares on Monday, Oct. 23, and list them on exchanges the following Friday. It will be the first time a Chinese company has debuted simultaneously on two stock markets.
Earlier news reports said ICBC hopes to raise up to US$19 billion (euro15 billion). That would break the IPO record of US$18.4 billion set in 1998 by Japanese mobile phone company NTT DoCoMo Inc.
ICBC said last week it plans to sell IPO shares worth US$3.5 billion (euro2.5 billion) to strategic investors. They include government investment agencies from Kuwait, Qatar and Singapore.
The announcement Wednesday came a day after the Chinese securities agency said it had approved the ICBC listing. The shares sold in Hong Kong will be denominated in Hong Kong dollars while the shares sold in Shanghai will be sold in yuan, the Chinese currency.
ICBC will be the third of China's "big four" state-owned commercial banks to sell shares to investors abroad. Hong Kong is Chinese territory but it has its own financial system and mainland regulators treat it as a foreign market.
China's banks are raising money to modernize as Beijing prepares to meet a December deadline for fully opening their market to foreign competitors under its World Trade Organization commitments.
The No. 2 lender, Bank of China, raised US$11.2 billion in May with an IPO in Hong Kong that was the world's fourth-largest on record. No. 3 China Construction Bank raised US$8 billion in October 2005.
ICBC reported assets of 6.5 trillion yuan (US$800 billion) as of the end of 2005.
The banks also have linked up with strategic partners from the United States, Europe and elsewhere who brought in new capital and helped to launch credit cards and other products.
In June, ICBC received a commitment from China's social security fund to invest more than 18 billion yuan (US$2.25 billion) in the bank.
In January, a group linking Goldman Sachs Group Inc., American Express Co. and Germany's Allianz AG agreed to invest US$3.78 billion.
Plans for an IPO by the remaining "big four" bank, Agricultural Bank of China, have been delayed due to its unusually large amount of bad loans.