As opposed to the credit crunch in the West, China’s robust bank IPO market, overall investment market liquidity and high valuations continue apace, with deals coming to market at 30x earnings or more. WSJ:

China Construction Bank Corp. said it raised 58.05 billion yuan ($7.72 billion) in its Class A-share initial public offering, after pricing nine billion new shares at 6.45 yuan each, the top end of its indicative price range, making it the country’s largest IPO to date…

The IPO price equates to 32.91 times 2006 earnings, China Construction Bank said. China’s three other major lenders — Industrial & Commercial Bank of China Ltd., Bank of China Ltd., and Bank of Communications Co. — trade at an average 30 times earnings…

Based on the subscription rates given by the bank, China Construction Bank’s IPO attracted a record 2.25 trillion yuan in subscription funds, underscoring the growing importance of financial services to China’s main stock market. The bank said the institutional tranche was 34 times oversubscribed, while the retail tranche was around 40 times oversubscribed.

Is it any kind of slowing or deflation of the Chinese bubble that recent deals are 34-40x oversubscribed, versus deals a few months ago which were over 100x oversubscribed? (Also: isn’t it remarkable that it was just two years ago that these big Chinese banks were getting government bailouts of tens of billions of dollars, and now they appear to be investment jewels?)

This entry was posted on Thursday, September 20th, 2007 at 1:46 am and is filed under China, General, business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.