China Everbright Bank Co. will delay a share sale in Hong Kong for a second time in less than two months because of volatile global stock markets, two people with knowledge of the matter said.
The Beijing-based lender won’t proceed with a plan to start trading on the city’s exchange on Aug. 18, said the people, who declined to be identified before an announcement. The people said no new timetable for the offering has been set.
Everbright Bank, which had considered cutting the size of the sale in half to about $3 billion, put the offering on hold as Chinese bank shares slumped to the lowest in more than a year amid concern that loans made to local governments may turn sour. Asian stock markets tumbled today, potentially putting planned offers by companies including Citic Securities Co. at risk.
“There’s weak market sentiment and there are concerns about local government financing vehicles in China, causing people to avoid Chinese bank stocks,” said Michiya Tomita, a Hong Kong-based fund manager for Mitsubishi UFJ Asset Management Co., which oversees about $65 billion globally.
China Shipping Nauticgreen Holdings Co. delayed a $200 million initial public offering in Hong Kong because of volatile stock markets, two people with knowledge of the matter said yesterday. The Hang Seng Finance Index fell 4.1 percent at 10:58 a.m. local time, the biggest drop since November 2009.
Shanghai-traded shares of Everbright bank fell to 3.14 yuan today, taking this year’s drop to 21 percent and giving the company a market value of 127 billion yuan ($20 billion). The lender had originally aimed to raise about $6 billion from the sale of 10.5 billion shares, according to a term sheet sent to investors on June 14.
Citic Securities, China’s biggest brokerage by market value, plans to raise about $2 billion in a share sale in Hong Kong, people with knowledge of the matter said in April. The company fell as much as 3.2 percent in Shanghai trading today, the biggest intraday loss since June 17.
China International Capital Corp., Morgan Stanley, UBS AG, BNP Paribas SA, BOC International Holdings Ltd., China Everbright Ltd., HSBC Holdings Plc, JPMorgan Chase & Co. and Shenyin Wanguo HK Ltd. are managing Everbright Bank’s offering.
Shen Chunhua, a deputy director of the bank’s Board Secretary Office in Beijing, didn’t immediately respond to a phone call seeking comment on the delay.