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Standard Chartered Plc will invest US$500 million as a cornerstone investor
in the Agricultural Bank of China's Hong Kong initial public offering, the
British bank said yesterday.
"The Agricultural Bank of China is a great bank with a great future,"
Standard Chartered Group Chief Executive Peter Sands said in a statement. "China
is a key market for us and our partnership is a strong symbol of our commitment
there."
ABC is set to offer more than 25.1 billion shares in Hong Kong as part of its
mega-sized dual-listing in Shanghai and Hong Kong. The Beijing-based bank could
net a maximum US$23.1 billion to surpass the Industrial and Commercial Bank of
China as the world's largest IPO.
Eleven so-called cornerstone investors, including Qatar's sovereign
investment fund, Standard Chartered Bank and Hong Kong's richest tycoon Li
Ka-shing, are investing in the IPO ahead of the bank's trading debut in the two
cities on July 15.
Using its cash reserves, the British bank will buy shares listed in Hong Kong
for US$500 million, it said.
"This investment is a natural next step in our long-standing relationship,
and it underpins our recent agreement to develop business together," Sands
said.
The Asia-focused British bank signed a memorandum of understanding with ABC
in June to seek opportunities in retail and wholesale banking in China and
globally.
Beijing-based ABC has the biggest network of 23,000 outlets in China with 2.6
million corporate clients and 320 million individual clients. Its assets totaled
US$1.3 trillion at the end of 2009.
Its extensive network in China's rural areas is a major selling point.
"The bank has potential in rural markets as China will generate growth in
rural areas," said Li Yamin, a Shenyin and Wanguo Securities
analyst. |
