Beijing lender soars on market debut

Bank of Beijing (BOB) saw its share price rise 81% as it made its trading debut on the Shanghai Stock Exchange on Wednesday, the Wall Street Journal reported. BOB, China's largest city commercial bank, earlier generated US$2 billion from the sale of 1.3 billion new A-shares. The gains came on a comparatively slow day for the market, the Shanghai Composite Index closing down 0.6% after a bout of profit-taking. According to analysts, BOB is currently trading at around 5.4 times its estimated 2007 book value, compared to 3.8 times for Bank of Nanjing and 7.6 times for Bank of Ningbo. BOB has access to an elite clientele in the capital but, like most city commercial banks, it has limited reach beyond its home city. The bank posted net profits of US$285 million in 2006, up 27% year-on-year.