Agri Bank of China Makes Small Gain in World's Biggest IPO, Asian Shares Decline

Asian markets closed lower Thursday. In China the Shanghai Composite Index fell 1.9% to 2,424 and in Hong Kong the Hang Seng Index retreated 1.5% to 20,256. Japan's Nikkei 225 Index dipped 1.1% to end the day at 9,686.

Agricultural Bank of China rose 1% in a disappointing day for what's been touted to be the world's biggest IPO, raising up to $22.1 billion. Among China's major banks that have gone public, Agri Bank has made the most meager first-day gain, says Bloomberg. In 2006, Industrial and Commercial Bank of China jumped 5.1% on its debut, while Bank of China jumped at least 23%. Tomorrow, Agri Bank goes public in Hong Kong where it is six times oversubscribed. The IPO has gone ahead despite gloomy market conditions, so it's no surprise that the IPO missed out on the double-digit gains often expected on opening day.

Other Chinese banking shares sank today as attention was focused on the big IPO. Bank of China plunged 2.3%, China Construction Bank slumped 2.1%, China Merchants Bank slid 2% and Industrial & Commercial Bank of China dropped 1.6%.

With the media honing in on the slowdown of the Chinese economy, investor sentiment in commodity producers and building material companies is waning. Today Anhui Conch, a cement maker, retreated 1.6% and China State Construction Engineering also lost 1.6%. Jiangxi Copper tumbled 1.4% and Zijin Mining Group, which may be in for hefty fines after an acid leak at a copper mine killed millions of fish, plunged 4.2%. China First Heavy Industries, which makes equipment for the mining industry, sank 3.2%.

Chinese airlines took a hit today, despite numbers showing that combined sales rose 42% in the first six months as compared with last year. Today China Southern Airlines dived 3.9%, China Eastern Airlines dropped 3.8% and Air China fell 2.6%.

In Hong Kong, Cathay Pacific lost 2% and other airlines suffered similar declines. Meanwhile, Cnooc, an oil and gas exploration company, nosedived 2.5% and Sinopec dropped 2%.

Hong Kong developers closed lower today. Henderson Land slumped 2.3% after reports that police seized documents from a law firm that were related to the sales of units at 39 Conduit Road, reports Bloomberg. So far, Henderson has not officially been charged with any wrong-doing. Swire Pacific, a major Hong Kong landlord, tumbled 2.1%, China Resource Land retreated 1.6%, Cheung Kong lost 1.4% and New World Development edged down 1.5%.

In Japan, shares in consumer electronic exporting companies were shaken by data showing that U.S. retail sales have declined. Canon was down 2.5%, Nikon dropped 2.3% and Konica Minolta lost 1.2%. Oki Electric, a computer and electronics maker, sank 5.2%, Sharp gave up 2.7% and Sony tumbled 2.4%.

Among Japanese car makers, Nissan lost 3.3% and Toyota slumped 2.3%.

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