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. Last Updated: 07/27/2016

Chinese Bank Offering Draws Strong Demand From Abroad

HONG KONG -- China CITIC Bank, which is raising up to $5.4 billion in what should be the world's biggest initial public offering so far this year, has seen its overseas institutional part more than 30 times covered before opening to retail investors on Monday, people familiar with the matter said.

On Thursday, China's seventh-biggest lender lowered its fundraising target and tightened the price range for its IPO despite strong investor interest ahead of the bank's dual Hong Kong/Shanghai listing.

"We adjusted the price range because we hope to leave more room for our investors in the aftermarket," said Kong Dan, chairman of the Beijing-based bank.

Previously, the bank had been aiming to raise as much as $5.7 billion.

The new range values the lender at 2.57 to 2.75 times its 2007 book value, compared with 2.48 to 2.81 times under its old range.

Unlike overseas book building, which involves hundreds of thousands of institutional investors, China's domestic book building process involves only some 190 qualified institutional investors. The issuer also has to consult the China Securities Regulatory Commission, the nation's securities watchdog, about the indicative price range.

"Both the qualified institutional investors and the CSRC deem the high end of the previous price range was too rich," said a source close to the matter.

The offer, which opened on April 10 for overseas institutional investors, will close Thursday, with a trading debut set for April 27. With a lower maximum issue price, market watchers expect investors will crowd into the IPO to tap China's 10 percent economic growth and rising consumer spending power.