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ABC's IPO First
May 11,2010 09:03CST
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BEIJING, May 11 -- Agricultural Bank of China (ABC) planned a simultaneous share float in Shanghai and Hong Kong in July, widely expected to be the biggest IPO in recent times, the Century Weekly reported on Monday, citing several unnamed sources.

The time of the initial public offering (IPO) of ABC, the smallest of the country's Big Four banks, is better than other banks' fund raising schedule, said sources.

The China Securities Regulatory Commission has set a clear timetable on the fund raising plans of China's major banks and will give corresponding oral instructions, such as "you should act quickly" or "you should wait" to different banks, according to an unnamed high-ranking bank official.

Other major banks should make way for ABC's float, which is in line with the intention of the authorities, the Century Weekly cited an unnamed source close to shareholders of major commercial banks.

However, Industrial and Commercial Bank of China (ICBC) started its emergent fund raising plan on Wednesday. Bank of China and Bank of Communications are also speeding up their fund raising activities.

Insiders considered these banks' move to be understandable, given the backdrop of ABC's $30 billion record-setting financing plan. The banks' competition on the timetable indicated concern over the uncertainty lingering on world as well China's economy.

One banker said that the investment value of China's banking industry is closely related with China's macro economy. The banker said whether international investors will buy into Chinese banks largely depends on their judgment on the prospects of the Chinese economy.

Once the second economic bottom appears or the economy gets too hot, banks will lose the best opportunities to raise money, a bank official in charge of refinancing said.

If no huge incidents take place on the market, whether ABC's listing will go first or other banks' money raising goes first does not make a big difference, a bank official said. The official added that the market still have enough capital and the European and American economies are yet to recover, which means there are not enough investment channels in these regions and investors there may turn to China.

However, ICBC should be allowed to refinance first, an investment bank official said, citing ICBC's better credit and small-level fund raising plan.

If ABC's IPO goes first, but do not perform well, it will give pressure to the market, the official added.

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