Postal Savings Bank of China's lukewarm Shanghai debut reflects underlining investor concerns, says GlobalData
Following the tepid debut of Postal Savings Bank of China (PSBC) on Shanghai Stock Exchange on 10 December 2019;
Aurojyoti Bose, Lead Analyst at GlobalData, a leading data and analytics company, offers his view on the first day of trading:
December 11, 2019 (Investorideas.com Newswire) "Postal Savings Bank of China, which is the largest bank in China in terms of the number of branches, raised approximately US$4bn in initial public offering (IPO) proceeds, making it the country's biggest IPO since 2015. However, the share prices moved just 2% higher than the IPO price of CNY5.5 and closed at CNY5.61 at the end of the first day of trading. It is in stark contrast to the double digit growth witnessed in most of the IPOs on the first trading day in the stock exchange.
"Interest in the bank's shares remained subdued with some investors, who were allocated PSBC shares, turning down the bank's stocks a week before it went public. The underwhelming stock performance of PSBC can primarily be attributed to bearish investor sentiments for banking stocks in the country on the backdrop of credit risk concerns and a slowing economy.
"Concerns around banking sector in China increased significantly following the recent failures/bailout of three banks, Baoshang Bank, Bank of Jinzhou and Hengfeng Bank. The worries were further intensified with China's central bank making a statement that more than 13% of the banks/financial service providers in the country were risky.
"Moreover, slowing economy is affecting the loan portfolio and financial performance of banks. However, amidst all these concerns, PSBC has been generating profits and seems to be resilient with an extensive branch network supporting growth in deposits, which stood at CNY9,239.7bn at the end of Q3 2019. Hence, it will be interesting to see if the bank is able to win investor trust in the long-run."
For more information
To gain access to our latest press releases: GlobalData Media Centre
Analysts available for comment. Please contact the GlobalData Press Office:
EMEA & Americas: +44 (0)207 832 4399
Asia-Pacific: +91 40 6616 6809
4,000 of the world's largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData's unique data, expert analysis and innovative solutions, all in one platform. GlobalData's mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.
This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.
More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com