The Chinese securities regulator on Wednesday gave the go-ahead to the staggering $30-billion issue from the Agricultural Bank of China, which will be the world's largest ever public public float.
The China Securities Regulatory Commission's public offering review committee made the announcement this afternoon after the commission said it began reviewing the Agricultural Bank of China initial public offering application this morning.
The bank is yet to decide its share price range if it gets regulatory approval. Analysts believe it will be in the 2.5 to 2.6 yuan range for A-shares because of the recent market volatility, official Xinhua news agency reported.
Analysts believe that the issue is expected raise $17 billion but could go as high as $30 billion if everything go according to the plan.
ABC is the last among China's big four state-owned banks to follow the three-step reform--clean-up of balance sheet, attracting foreign investors and going public. Its rivals, ICBC, the Bank of China and China Construction Bank, are all dual-listed in Shanghai and Hong Kong.
Also Rabobank Groep NV, the world's biggest agricultural lender, said it will start a strategic partnership with ABC in wholesale banking, rural finance,asset management and leasing, as well tapping joint business opportunities.
Though ABC, with most of its business in coming in from rural areas, is less profitable than its state-owned rivals, chairman Xiang Junbo is confident that investors will eye its 350 million customers as the central government aims to cut the gap between affluent cities and rural areas.
Liao Qiang, a Beijing-based analyst at Standard & Poor's, said ABC's rural operations are not profitable yet, but he has "no doubt" that it will eventually become a stable growth engine that can't be easily matched by competitors.
Many analysts, however, questioned the timing of the decision pointing to concerns of a double-dip recession in the global economy amid the Greece debt crisis as well as worries of a domestic stock market slide and a correction in the housing market.
