China Everbright debut day of IPO beats forecasts

Investors' optimism on smaller Chinese banks gave lender share price gain that surpassed AgBank's.

China Everbright Bank shares closed up 18 percent on their Shanghai debut, trumping first-day performance forecasts for the $3 billion IPO, boding well for at least $20 billion in China bank fundraising in the pipeline.

The share price gains easily beat those for Agricultural Bank of China, the world's biggest IPO. AgBank's Shanghai shares rose less than one percent on their first day of trade in mid-July and have stagnated since.

Analysts attributed Everbright's strong performance to investor's optimism about the smaller Chinese banks and their strong earnings reports as well as Everbright's IPO pricing at a lower valuation than many of its peers.

"Everbright's debut surprised me," said Dorris Chen, analyst at BNP Paribas in Shanghai. "We're in the earnings season, and we do see some very punchy numbers from smaller banks such as China Merchants , Minsheng and Citic Bank, and Everbright. Because it's a new listing, so the number has to be good."

The bank launched its offering in market conditions significantly different from just over a month ago when AgBank launched its IPO, with the Shanghai stock index .SSEC rising 10 percent in the period.

View the full story in Reuters.