The tranche of the ICBC bank offering directed at mainland retail investors was 49 times subscribed, with demand reaching Rmb650 billion (€65 billion), an unprecedented level for the Chinese capital market.
The huge interest in the offering is a measure of sums potentially available to the Chinese equity market given the high savings rate and limited alternatives for individual investors.
The thirst for the IPO among Shanghai retail investors pushed total demand past $500 billion. The bank had previously booked orders worth $350 billion for its Hong Kong institutional offer, $55 billion for its Hong Kong retail tranche and about $25 billion for its Shanghai institutional offering.
The response helped lift Hong Kong's Hang Seng index to an intra-day peak of 18,148.04 - about 1.5 per cent short of its record in March 2000. The index closed 0.7 per cent up at 18,113.55.
Hong Kong's China Enterprises index of mainland H shares rose 1 per cent, topping 7,500 for the first time since early 1994. ICBC will sell H shares in Hong Kong at HK$3.07 each and Shanghai-listed A shares at Rmb3.11 each, both at the top end of the forecast range. When the shares trade on October 27th, it will be the first simultaneous listing in Shanghai and Hong Kong.
The demand among Hong Kong retail investors, who subscribed their tranche 78 times, means this slice will be increased to 10 per cent of the shares on offer in the territory. This will raise the total of the IPO to $21.9 billion.
But Shanghai's retail subscriptions dwarfed even the record demand triggered by ICBC's offering in Hong Kong, where $55 billion chased the 5 per cent of shares initially reserved.
ICBC's offering triggered fervour this week in Hong Kong, but it is not clear how much of the mainland Chinese demand came from individual investors.
