Friday, June 03, 2005

Citibank may lose China IPO

By Cathy Chan Bloomberg News

FRIDAY, JUNE 3, 2005
HONG KONG China Construction Bank, China's third-largest lender, may exclude Citigroup from its planned $5 billion initial public offering this year, people involved in the transaction said.

Construction Bank did not invite Citigroup to meetings with investment bankers from Morgan Stanley and China International Capital during the past two weeks, the people said Wednesday.

Citigroup, Morgan Stanley and CIC were hired last year to prepare the bank for an IPO. Citigroup was in talks to buy a stake in Construction Bank, but those talks had stalled, the people said.

Underwriters of Construction Bank's IPO probably will be paid about $150 million in fees, equal to 3 percent of the transaction's value.

The high-profile offering will be the first overseas share sale for one of the four largest state-owned lenders in China.

"It would be a slap in the face if they lose out," said Sam Ho, a fund manager at KDB Asia in Hong Kong. "The extent of the damage remains to be seen."

Richard Tesvich, Citigroup's spokesman in Hong Kong, declined to comment.

Cai Xiang, a spokesman for Construction Bank in Beijing, also declined to comment, as did Nick Footitt, his counterpart at Morgan Stanley in Hong Kong, and China International Capital's Beijing-based spokesman, Feng Danyun.

Citigroup replaced the head of its China investment banking business last July and Construction Bank removed its chairman in March. Both took part in the talks that led to Citigroup's inclusion among the banks preparing the offer.

Citigroup still is negotiating to remain in the transaction, the people said. Citigroup's chief executive, Charles Prince, met with Construction Bank's new chairman, Guo Shuqing, in Beijing as recently as two weeks ago, they said, without being more specific.

Prince declined to disclose details of Citigroup's plans to expand in China, when asked at a conference in Beijing on May 18. Guo said on May 5 that Construction Bank was negotiating with several investors to sell a stake before the public offering.

"Losing a major investment bank handling the sale would be challenging," said Bryan Yip, a fund manager at Standard Life Investments in Hong Kong. "The huge supply of stock needs as many distribution channels as possible."

Tokyo share offer on track

The Tokyo Stock Exchange said it would push ahead with a plan to sell shares by the end of March, and that it would allow domestic investors to trade stocks in some other Asian markets in 12 months.

"Our goal is still to list this fiscal year," Toshitsugu Shimizu, the exchange's executive officer, said in an interview at a World Federation of Exchanges conference in Beijing on Thursday.

A weekend newspaper report said the exchange had backed away from plans for a public offering by March because regulators doubted that it could oversee itself as a for-profit company. Shimizu declined to comment on discussions with the Financial Services Agency.

Shimizu said he also expected the exchange to enable investors to buy and sell shares of companies in other Asian markets, including Singapore and Australia, within 12 months.

The exchange "won't be able to survive by itself," said Shimizu. "Twenty years ago, Tokyo Stock Exchange was the only giant in the region, but nowadays it isn't and in the future it won't be" unless it pursues broader regional alliances.


HONG KONG China Construction Bank, China's third-largest lender, may exclude Citigroup from its planned $5 billion initial public offering this year, people involved in the transaction said.

Construction Bank did not invite Citigroup to meetings with investment bankers from Morgan Stanley and China International Capital during the past two weeks, the people said Wednesday.

Citigroup, Morgan Stanley and CIC were hired last year to prepare the bank for an IPO. Citigroup was in talks to buy a stake in Construction Bank, but those talks had stalled, the people said.

Underwriters of Construction Bank's IPO probably will be paid about $150 million in fees, equal to 3 percent of the transaction's value.

The high-profile offering will be the first overseas share sale for one of the four largest state-owned lenders in China.

"It would be a slap in the face if they lose out," said Sam Ho, a fund manager at KDB Asia in Hong Kong. "The extent of the damage remains to be seen."

Richard Tesvich, Citigroup's spokesman in Hong Kong, declined to comment.

Cai Xiang, a spokesman for Construction Bank in Beijing, also declined to comment, as did Nick Footitt, his counterpart at Morgan Stanley in Hong Kong, and China International Capital's Beijing-based spokesman, Feng Danyun.

Citigroup replaced the head of its China investment banking business last July and Construction Bank removed its chairman in March. Both took part in the talks that led to Citigroup's inclusion among the banks preparing the offer.

Citigroup still is negotiating to remain in the transaction, the people said. Citigroup's chief executive, Charles Prince, met with Construction Bank's new chairman, Guo Shuqing, in Beijing as recently as two weeks ago, they said, without being more specific.

Prince declined to disclose details of Citigroup's plans to expand in China, when asked at a conference in Beijing on May 18. Guo said on May 5 that Construction Bank was negotiating with several investors to sell a stake before the public offering.

"Losing a major investment bank handling the sale would be challenging," said Bryan Yip, a fund manager at Standard Life Investments in Hong Kong. "The huge supply of stock needs as many distribution channels as possible."

Tokyo share offer on track

The Tokyo Stock Exchange said it would push ahead with a plan to sell shares by the end of March, and that it would allow domestic investors to trade stocks in some other Asian markets in 12 months.

"Our goal is still to list this fiscal year," Toshitsugu Shimizu, the exchange's executive officer, said in an interview at a World Federation of Exchanges conference in Beijing on Thursday.

A weekend newspaper report said the exchange had backed away from plans for a public offering by March because regulators doubted that it could oversee itself as a for-profit company. Shimizu declined to comment on discussions with the Financial Services Agency.

Shimizu said he also expected the exchange to enable investors to buy and sell shares of companies in other Asian markets, including Singapore and Australia, within 12 months.

The exchange "won't be able to survive by itself," said Shimizu. "Twenty years ago, Tokyo Stock Exchange was the only giant in the region, but nowadays it isn't and in the future it won't be" unless it pursues broader regional alliances.


HONG KONG China Construction Bank, China's third-largest lender, may exclude Citigroup from its planned $5 billion initial public offering this year, people involved in the transaction said.

Construction Bank did not invite Citigroup to meetings with investment bankers from Morgan Stanley and China International Capital during the past two weeks, the people said Wednesday.

Citigroup, Morgan Stanley and CIC were hired last year to prepare the bank for an IPO. Citigroup was in talks to buy a stake in Construction Bank, but those talks had stalled, the people said.

Underwriters of Construction Bank's IPO probably will be paid about $150 million in fees, equal to 3 percent of the transaction's value.

The high-profile offering will be the first overseas share sale for one of the four largest state-owned lenders in China.

"It would be a slap in the face if they lose out," said Sam Ho, a fund manager at KDB Asia in Hong Kong. "The extent of the damage remains to be seen."

Richard Tesvich, Citigroup's spokesman in Hong Kong, declined to comment.

Cai Xiang, a spokesman for Construction Bank in Beijing, also declined to comment, as did Nick Footitt, his counterpart at Morgan Stanley in Hong Kong, and China International Capital's Beijing-based spokesman, Feng Danyun.

Citigroup replaced the head of its China investment banking business last July and Construction Bank removed its chairman in March. Both took part in the talks that led to Citigroup's inclusion among the banks preparing the offer.

Citigroup still is negotiating to remain in the transaction, the people said. Citigroup's chief executive, Charles Prince, met with Construction Bank's new chairman, Guo Shuqing, in Beijing as recently as two weeks ago, they said, without being more specific.

Prince declined to disclose details of Citigroup's plans to expand in China, when asked at a conference in Beijing on May 18. Guo said on May 5 that Construction Bank was negotiating with several investors to sell a stake before the public offering.

"Losing a major investment bank handling the sale would be challenging," said Bryan Yip, a fund manager at Standard Life Investments in Hong Kong. "The huge supply of stock needs as many distribution channels as possible."

Tokyo share offer on track

The Tokyo Stock Exchange said it would push ahead with a plan to sell shares by the end of March, and that it would allow domestic investors to trade stocks in some other Asian markets in 12 months.

"Our goal is still to list this fiscal year," Toshitsugu Shimizu, the exchange's executive officer, said in an interview at a World Federation of Exchanges conference in Beijing on Thursday.

A weekend newspaper report said the exchange had backed away from plans for a public offering by March because regulators doubted that it could oversee itself as a for-profit company. Shimizu declined to comment on discussions with the Financial Services Agency.

Shimizu said he also expected the exchange to enable investors to buy and sell shares of companies in other Asian markets, including Singapore and Australia, within 12 months.

The exchange "won't be able to survive by itself," said Shimizu. "Twenty years ago, Tokyo Stock Exchange was the only giant in the region, but nowadays it isn't and in the future it won't be" unless it pursues broader regional alliances.


HONG KONG China Construction Bank, China's third-largest lender, may exclude Citigroup from its planned $5 billion initial public offering this year, people involved in the transaction said.

Construction Bank did not invite Citigroup to meetings with investment bankers from Morgan Stanley and China International Capital during the past two weeks, the people said Wednesday.

Citigroup, Morgan Stanley and CIC were hired last year to prepare the bank for an IPO. Citigroup was in talks to buy a stake in Construction Bank, but those talks had stalled, the people said.

Underwriters of Construction Bank's IPO probably will be paid about $150 million in fees, equal to 3 percent of the transaction's value.

The high-profile offering will be the first overseas share sale for one of the four largest state-owned lenders in China.

"It would be a slap in the face if they lose out," said Sam Ho, a fund manager at KDB Asia in Hong Kong. "The extent of the damage remains to be seen."

Richard Tesvich, Citigroup's spokesman in Hong Kong, declined to comment.

Cai Xiang, a spokesman for Construction Bank in Beijing, also declined to comment, as did Nick Footitt, his counterpart at Morgan Stanley in Hong Kong, and China International Capital's Beijing-based spokesman, Feng Danyun.

Citigroup replaced the head of its China investment banking business last July and Construction Bank removed its chairman in March. Both took part in the talks that led to Citigroup's inclusion among the banks preparing the offer.

Citigroup still is negotiating to remain in the transaction, the people said. Citigroup's chief executive, Charles Prince, met with Construction Bank's new chairman, Guo Shuqing, in Beijing as recently as two weeks ago, they said, without being more specific.

Prince declined to disclose details of Citigroup's plans to expand in China, when asked at a conference in Beijing on May 18. Guo said on May 5 that Construction Bank was negotiating with several investors to sell a stake before the public offering.

"Losing a major investment bank handling the sale would be challenging," said Bryan Yip, a fund manager at Standard Life Investments in Hong Kong. "The huge supply of stock needs as many distribution channels as possible."

Tokyo share offer on track

The Tokyo Stock Exchange said it would push ahead with a plan to sell shares by the end of March, and that it would allow domestic investors to trade stocks in some other Asian markets in 12 months.

"Our goal is still to list this fiscal year," Toshitsugu Shimizu, the exchange's executive officer, said in an interview at a World Federation of Exchanges conference in Beijing on Thursday.

A weekend newspaper report said the exchange had backed away from plans for a public offering by March because regulators doubted that it could oversee itself as a for-profit company. Shimizu declined to comment on discussions with the Financial Services Agency.

Shimizu said he also expected the exchange to enable investors to buy and sell shares of companies in other Asian markets, including Singapore and Australia, within 12 months.

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