Agricultural Bank of China is IPO laggard.

EACH YEAR GLOBAL INVESTORS eye china’s initial- public-offering pipeline and jump to the same two erroneous conclusions. First, that the day of the blockbuster mainland listing is over. Second, that the ripest stock offerings have all been plucked, from banking and oil and gas to insurance and airlines.

Entering the third month of the Year of the Tiger (which traditionally brings both turbulence and opportunity), China’s hunger for new capital remains as great as the global desire to provide it.

Beijing’s 800-pound gorilla this year is Agricultural Bank of China, the only member of the country’s “Big Four” lenders yet to list shares. ABC is a rural institution that long ago morphed into a standard-issue Chinese bank replete with a superficially healthy loan book. It’s set to launch a $12 billion to $20 billion joint Hong Kong-Shanghai IPO between fall 2010 and, at the latest, spring 2011.

That timeline could be brought forward. A senior official of the bank was recently quoted in China’s state media saying that the sale could go ahead by mid-September. The lender’s minimum IPO target is near the $11.2 billion raised in June 2006 by Bank of China’s (ticker: 3988.HongKong, 601988.China) Hong Kong stock sale. Few believe ABC will have to leave money on the table. “Agricultural Bank of China is the big IPO that everyone is waiting for,” says Reginaldo Cariaso, executive director, equity capital markets, Asia ex-Japan at Nomura.

The bank’s IPO isn’t the only big deal on the horizon. Once decried as a tool of the imperialist West, China’s railway system has long had third-class status behind the internal-combustion engine and the jet plane.

No longer. China is finally getting serious about its lumbering “iron roosters.”

First up is a 30 billion to 50 billion yuan ($4.4 billion to $7.3 billion) IPO by Beijing-Shanghai High-Speed Railway, scheduled for the third quarter of the year. The U.S.’s JPMorgan Chase, Australia’s Macquarie, and two Chinese investment houses, Bank of China International and CICC, will handle the sale.

The Beijing-Shanghai line, due for completion in 2011, will cut travel between the two cities from 10 hours to just four. Construction on the 800-mile rail link began in 2008 and has so far cost more than 120 billion yuan. In time, Beijing’s mandarins hope to create a vast inter-state rail network to rival Japan’s Shinkansen (bullet train) network. Its Ministry of Railways says five trillion yuan in investment will be needed by 2020. A large chunk will come from global investors keen to make a profit.

Bankers say more high-speed rail-line IPOs are being lined up for 2011, including the link between Shanghai and Guangzhou, a city close to the border with Hong Kong, which could raise up to $10 billion. “There will be a lot of attention around high-speed rail and rail infrastructure in general for a long time to come,” says Nomura’s Cariaso. “Rail travel works very well in a country this size.”

As ever, smaller — but not small — initial stock sales also dot the landscape. China Everbright Bank, a midsized lender that has long labored in the shadow of larger rivals, is set to complete a $1.7 billion to $2.4 billion stock sale in Shanghai in the second or third quarter.

Guangdong Development Bank, controlled by U.S. financial giant Citigroup (C), is also eyeing a listing, in either or both Hong Kong and Shanghai, in early 2011. GDB, which has turned from laggard to regional leader since Citi took the helm, hopes to raise up to $2.5 billion in an IPO slated for the fourth quarter 2010 or early 2011.

China International Trust and Investment Corporation, the country’s leading financial conglomerate, is also mulling the listing of its real-estate division, in the third or fourth quarter. China’s top financial conglomerate could raise up to $1.3 billion by spinning off CITIC Real Estate, according to Chairman Kong Dan.

Last but not least, investors seeking a dash of old-fashioned romance and tradition should look no further than the proposed $3 billion sale of Swire Property (19.Hong Kong) — one of the fastest-growing property developers in Beijing and Shanghai — slated for the second or third quarter 2010.

Swire may not be a genuine gorilla by Chinese standards but, if completed, the sale by the London-based group — founded in Liverpool in 1816 before finding fame and fortune in the Orient — would mark the biggest Asia-Pacific real-estate IPO in over a decade.

Who said the era of landmark China-related stock sales is over?

Tags: asian markets, global investors, investors, japan, thailand

This entry was posted on Saturday, April 3rd, 2010 at 10:33 am and is filed under Asian Finance, Chinese Finance, Global Economy, Japan Finance, Market Finance, World Financial. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.