Rush on China Merchants Securities float

CHINA Merchants Securities Co drew 1.1 trillion yuan (US$161.13 billion) in subscriptions and was nearly 94 times oversubscribed for its initial public offering in Shanghai today.

The country's eighth-biggest brokerage plans to sell 358.55 million shares at 31 yuan apiece to raise 11.1 billion yuan through its IPO to supplement operational capital, such as expanding asset management, its investment bank, private equity investment, brokerage and proprietary sectors.

The price is 56.26 times its earnings per share in 2008, Merchants Securities said.

"Its IPO price is higher than estimated. We expected its stock will be priced between 21 yuan and 24 yuan this year, and between 24 yuan and 28 yuan next year," said Huang Qiuhan, an analyst at Sealand Securities Co.

The Shenzhen-based brokerage won approval for listing from the China Securities Regulatory Commission last year, but the slumping stock market made the regulator suspend new share sales until June.

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