Investment Bank: Morgan Stanley IPO: China Merchants Bank (CMB)

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Investment Bank Morgan StanleyIPO China
Merchants Bank (CMB)

• Group 5
• Li Ying Yeung, Ocean (043118)
• Tsang Lai Sing (043119)
• Chan Tsz Yan, Jessica (043120)
• Chan Ying Tung, Bonnie (043127)
• Chan Suet Yee, Cherrie (043129)

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• 1) What is the ranking of the Morgan Stanley in
  securities industry?

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Ranking of America's largest corporations in
securities (Fortune500 in 2006)
Rank Company 500 rank Revenues (US million)
1 Morgan Stanley 30 52,498.0
2 Merrill Lynch 34 47,783.0
3 Goldman Sachs Group 41 43,391.0
4 Lehman Brothers 62 32,420.0
5 Bear Stearns 202 11,552.4
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• Morgan Stanley is the highest ranking company in
  the securities, which earns the most revenue
  among others
• Major competitors of Morgan Stanley are Merrill
  Lynch and Goldman Sachs Group

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Examples of works done by Morgan Stanley

• Mergers and Acquisitions
• Restructuring and Recapitalization Advisory
• Public and Private Debt and Equity Underwriting
• Mortgage Financing
• Investment and Asset Management

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• 2) What is the strength of IPO of China Merchant
  Bank compared to other China banks listed in H.K.?

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• Countrys sixth-largest bank
• Highest retail deposits per branch at about 561
  million yuan
• More efficiently run

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• Fewer non-performing loans
• Operated more like a for-profit business
• One of the best commercial banks on the mainland
  in terms of efficiency, management and service
  quality.

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• 3) Who were the underwriters
• for IPO of
• China Merchants Bank?

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The underwriters of CMB

• J.P Morgan Chase
• UBS
• China International Capital
• P.S. There is a conflict if investment banks
  promote two companies in the same industry around
  the same time and overlap of mandates.

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• 4) What was the closing price on the
• first listing day of
• China Merchants Bank?

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Price of the CMB on first listing day

• The value of the price per share was HK8.55
• Rose to HK11.14 within 7 minutes
• Lastly, closed at HK10.68
• Totally, increased 24.5
• Offering HK206.9 million on first day

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• 5) Was every retain applicant
• allotted the share in IPO of China Merchants Bank?

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• CMB decided NOT every retain applicant was
  allotted shares
• Unfair if those applicants who locked up huge
  amounts of capital just received one or two lots
• Institutional portion was reduced from 95 to 80
• Retail portion was increased to 20 from 5

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• END