Source:  The Wall Street Journal Asia                        Date: 17 August, 2010

Agricultural Bank of China Ltd has raised more money in an initial public offering than any other company in history after fully exercising an option to allot additional shares to investors on the Shanghai Stock Exchange, despite lackluster interest in the shares from investors since they started trading in mid-July. In a statement on the Shanghai Stock Exchange, the rural lender said it raised an additional 9.11 billion yuan (USD1.34 billion) from the Shanghai portion of the IPO by selling an additional 3.4 billion shares at the IPO price of 2.68 yuan each.

By exercising the overallotment option—also known as a greenshoe—AgBank brings the total amount raised from its dual listing in Hong Kong and Shanghai to USD22.1 billion, eclipsing the record held by Industrial & Commercial Bank of China Ltd. for its USD21.93 billion IPO in 2006. AgBank's shares have struggled to stir interest among investors even as China's A-share market has rallied. One of the worst-performing stock indexes globally in the first half of the year, the benchmark Shanghai Composite Index has risen more than 10% since bottoming out in early July.

AgBank's IPO has been under a lot of pressure politically to succeed. The last of China's major banks to publicly list shares, it originally hoped to raise as much as USD30 billion. By the time AgBank started tapping investors, markets had soured globally. Furthermore, doubt over the quality of the bank itself, long regarded as the weakest of China's four major banks, and its exposure to the country's less-developed rural areas, also took a toll on investor confidence. A roster of cornerstone investors, dominated by state-owned firms, rallied to support the IPO, taking 40% of the Shanghai issue.