Tuesday, October 24, 2006

IBN, HDB should Draw Strong Interest from China's ICBC Listing

The Indian Blue chip banks, IBN and HDB on NYSE, should draw strong interest from the coming launch (IPO) of China's biggest Bank on the Hong Kong Stock Exchange. The offering is estimated to be $19B, making it the world's largest offering EVER. See more on the ICBC offering here.

ICBC is China's biggest bank, and assuming a successful offering (the other two banks which IPOed on Hong Kong Stock Exchange-China Mercantile and Bank of China- earlier this year were flying successes-they are up nicely from their IPO price), this should bring additional investors to Indian Banks. IBN and HDB are by far the biggest private sector banks in India (the other big guy is State Bank of India, which does not have ADRs) and are probably the most directly bet on the Indian Economy.

IBN sports a market cap of $15B, and HDB is $7B. ICBC is expected to come out with the total market value of $150B. Do you see what I see? A lot of room to grow for the Indian banks.

The Indian economy and growth story is what China was 6-8 years ago. The party for Indian stocks has just begun-and some nice returns are to be made in the coming decade on buying Indian stocks. Unless the Government of India does something stupid-and I will be first to tell you if it does, right here on this blog.

Sanjay John G.



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