ICBC sees tumble on resumption of trading
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The Industrial and Commercial Bank of China fell by the 10 percent daily cap in Shanghai trading yesterday after it resumed trading following a week's suspension for a rights issue.
Shares of the world's most valuable lender have been suspended from trading since November 16 for it to complete its 45 billion yuan (US$6.8 billion) rights offer.
ICBC closed at 4.42 yuan yesterday. The Shanghai Composite Index rose 1.1 percent to close at 2,859.9 as concerns over tightening measures eased on reports the government may raise the inflation target next year to 4 percent.
The gauge tumbled 5 percent in the past week amid the government's tougher stance to curb asset bubbles including raising banks' reserve requirement ratio for the second time in nine days.
ICBC priced the rights issue at 2.99 yuan per share in Shanghai, representing a discount of 37 percent to the closing price on November 10 when it announced the plans. A total of 99.57 percent of the rights issue were subscribed as investors chased the discounted issue.
''Profit-taking may weigh on shares of ICBC over the next couple of days while the bank is a good investment for long-term investors due to its low valuation and earnings prospects,'' said Yuan Jianxin, an analyst at Changjiang Securities Co.
ICBC has previously said the proceeds will be used to replenish its capital while China's top banking regulator required banks to have a higher capital adequacy ratio to reduce risks.
