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Steve Chiotakis: It’s expected to be the world’s largest stock offering. The Agricultural Bank of China plans to list on the the Chinese exchanges next month. Today the bank’s CEO is in London, trying to whip up support.
The BBC’s Rebecca Singer reports for Marketplace.
Rebecca Singer: The Agricultural Bank of China has come a long way from its humble origins. It was set up in 1951 to lend money to China’s poor rural farmers. But today people in Hong Kong were queuing up to register their interest in some of the $23 billion of shares the bank plans to sell. And substantial amounts have already been pledged by banks in the U.K. and the Middle East.
But Daniel Rosen from the Rhodium Group in New York says the main customers will come from inside China itself.
Daniel Rosen: Its first and foremost audience is the domestic audience. A big part of the demand for the shares of the Agricultural Bank of China will be subscribed by domestic, institutional investors. Not just by foreign ones.
This is the last of China’s big state-owned banks to go public. But there’s some concern it could also be the weakest. Most of its customers are less affluent and live in the countryside. And returns on its loans are lower than those made to customers in the cities. But the bank insists the business will benefit as rural incomes and economic growth in the less-developed areas grow.
In London, I’m the BBC’s Rebecca Singer for Marketplace.
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