Chinese regulator's move stales Minsheng's IPO

Minsheng shares dipped 3 percent during IPO as Beijing reportedly pressured banks to increase capital adequacy ratio.

China Minsheng Banking Corp fell a disappointing 3 percent in its Hong Kong debut on Thursday after raising $3.9 billion in the world's fifth largest IPO this year, underscoring how sentiment for Chinese banks has soured recently.

Chinese banking stocks have come under pressure on concerns of potential cash calls as Beijing may hike larger state lenders' capital adequacy ratios or reserve requirements next year to cool a lending binge, as stated in a report in Reuters.

Recent high IPO volume in Hong Kong -- this week alone has seen a flurry of trading debuts -- as well as reports of Chinese banks discussing fundraising pressured the first day of trading for Minsheng, China's seventh-largest listed bank, said Chen Xingyu, an analyst at Phillip Securities Research in Shanghai.

"Considering the number of IPOs in recent weeks, Minsheng would become less attractive to investors in terms of pricing as there are a number of choices in the market," Chen said.

Minsheng, founded by 59 private enterprises in 1996, including New Hope Group founder and billionaire Liu Yonghao, attracted well known investors including George Soros and Singapore state fund Temasek to the IPO.
 

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