Shares in Bank of China surged 15 per cent on their first day of trading on Thursday as investors defied global stock market jitters to give a thumbs-up to the world?s biggest initial public offering for six years.

BoC shares, which listed on the Hong Kong stock exchange, closed up HK$0.45 at HK$3.40, giving the bank a total market value of US$106.7bn, making it the eighth-largest in the world.

The successful US$9.7bn offering will provide a strong boost to Industrial and Commercial Bank of China, the country?s largest lender, which is planning a US$12bn offering this year. One person close to the ICBC sale process said: ?This shows that retail and institutional demand for Chinese bank stocks remains high.?

Investors appear to have bought BoC shares to tap into China?s surging economy and its emerging consumer credit sector, believing that the advantages outweigh concerns about credit quality and poor lending practices. Xiao Gang, BoC chairman, said: ?We are confident about our share price performance as the group?s continued operation will create shareholder value.?

Analysts said BoC?s share price was helped by news that Japan?s Mitsubishi UFG Financial Group, the world?s largest bank, spent $180m buying a 0.2 per cent stake.

Analysts said the BoC debut was better than expected. Ben Kwong of KGI Asia in Hong Kong said: ?This is a good performance given the backdrop of recent market weakness.?

BoC?s rise comes against a backdrop of falling Asian stock markets. Hong Kong?s Hang Seng index shed 1.3 per cent on Thursday over fears that rising global interest rates would dent Asia?s exports to the US.

Analysts said investors were attracted by BoC?s comparatively low price. The bank was priced at 2.18 times its estimated book value for this year. China Construction Bank and Bank of Communications, rival state-owned lenders that recently listed in Hong Kong, are trading at more than 2.5 times book value.

The value of CCB?s and BoCom?s shares have surged since their Hong Kong flotations last year, prompting a debate about whether China?s financial assets have been sold to overseas investors too cheaply.

But many investors believe the surge in demand for Chinese bank stocks is a bubble. ?I don?t believe in listed [Chinese] banks. They?ve listed too soon,? said Hong Kong-based investor David Webb, a director on the Hong Kong Stock Exchange. ?We?ll have a mainland banking crisis within 10 years.?

The BoC listing was sponsored by Goldman Sachs and UBS.

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