China Everbright Bank (601818.SH) may raise around US$7 billion through a share sale in Hong Kong, Reuters reported. The plan, announced Monday, took many analysts by surprise, coming as it does only six months after the bank’s US$3 billion IPO in Shanghai. The move is seen as a response to the aggressive tightening of liquidity being implemented by Beijing in an attempt to cool economic growth and inflation. “This is a strategic move that would open a new channel of capital-raising for Everbright and shows that in the banking sector, capital is king,” said Jin Lin, analyst at Orient Securities. Everbright plans to sell up to 10.5 billion H-shares, with an over-allotment of as much as 1.5 billion shares, bringing the total issuance to up to 12 billion shares. The bank’s Shanghai-traded A-shares closed at US$0.6 on Friday, based upon which it could raise approximately US$7.6 billion in the Hong Kong sale, not including the over-allotment.
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