It may have been the world's largest initial public offering (IPO) in two years, but shares of Postal Savings Bank of China (PSBC) hit the Hong Kong market like a wet firecracker on Wednesday.
The shares closed at 4.77 Hong Kong dollars ($0.62), just smidgeon higher than their HK$4.76 IPO price, which Reuters reported was itself at the bottom of the HK$4.68-HK$5.18 marketing range. The stock traded in a very tight range all day.
It was a wet performance after PSBC raised $7.4 billion in the share sale, making it the largest IPO globally since internet giant Alibaba raised $25 billion in 2014.
But analysts noted that even at the low end of the pricing range, PSBC's shares had a top-heavy valuation at a bit above book value, compared with other mainland banks priced at around 0.8 times book value.
Additionally, six cornerstone investors snapped up 77 percent of the shares. While those investors won't be allowed to sell for six months, that created an overhang of potential selling when the lockup period expires on shares of China's sixth-largest bank, which has around a half-billion Chinese customers.
Soros Fund Management may have been among the institutional investors. Chinese business magazine Caixin reported, citing sources with knowledge of the investment, that the asset management company founded by storied billionaire investor George Soros had subscribed to the IPO. A representative for George Soros didn't immediately return an email requesting comment sent outside office hours.