Guangzhou Rural Bank makes subdued HK debut after $1 bln IPO


UPDATE 1-Guangzhou Rural Bank makes subdued HK debut after $1 bln IPO

* Shares up slightly after rural bank raises $1 bln in IPO
    * Retail investors buy less than half of shares on offer

 (Recasts and adds other bank IPOs)
    HONG KONG, June 20 (Reuters) - Shares in Guangzhou Rural
Commercial Bank Co Ltd (GRCB) <1551.HK> traded mostly flat in
their debut on Tuesday as retail investors shied away from the
largest IPO in Hong Kong so far this year, a sign of diminishing
interest in financial sector listings.
    Banks, brokerages and other financial services firms
typically account for the bulk of new listings in the city, but
have only comprised 23 percent of IPOs so far in 2017, weighed
down by concerns over rising bad debt in China.
    The subdued first day of trade contrasts with heavy interest
in WuXi Biologics Cayman Inc <2269.HK>, a rapidly growing
contract drug researcher and development firm, that surged as
much as much as 39 percent in its debut earlier this month.
    China's No.5 rural commercial bank by assets edged up to
HK$5.12, compared with its IPO price of HK$5.10. The benchmark
Hang Seng index <.HSI> was flat.
    GRCB priced its $1 billion IPO slightly below the middle of
its marketing range of HK$4.99 to HK$5.27 per share.
    Demand from retail investors - who have a significant
influence over first-day trading in Hong Kong share offerings -
accounted for 0.45 times the number of shares on offer in the
deal, the lender said in a securities filing on Monday,
underscoring weak appetite for the deal.
    The institutional tranche was moderately oversubscribed.
    The deal is the second by a rural commercial bank in Hong
Kong this year, following a $446 million listing by Jilin Jiutai
Rural Commercial Bank Corp Ltd <6122.HK> in January.
    Non-performing loans at Chinese commercial banks rose to
1.58 trillion yuan ($232 billion) at the end of March, from 1.51
trillion yuan in December, regulatory data showed. With the
world's No.2 economy growing at a slower pace, that figure is
expected to climb further, analysts have said.
    Other lenders looking to go public this year include
Zhongyuan Bank and Bank of Gansu, which plan to raise about $1
billion and $700 million respectively.

 (Reporting by Elzio Barreto; Editing by Richard Pullin and
Edwina Gibbs)
 ((;)(852)(2843-1608; Reuters


This article appears in: World Markets , Economy , Banking and Loans , US Markets , Stocks , IPOs
Referenced Symbols: 1551 , 2269 , 6122

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