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Shares of Major Chinese Bank Listed, Initial Trading Lackluster

Shares of one of China's four major banks had a lackluster start on Hong Kong's stock exchange, while the country's leading Internet search engine reported higher third-quarter earnings.

China Construction Bank, the first of China's four big state-owned banks to sell shares publicly to overseas investors, made a meek trading debut on Hong Kong's stock exchange. On its first trading day on Thursday, its shares closed unchanged from the initial listing price of 30 cents, disappointing investors and analysts who had expected gains.

Still, it was China's biggest initial public offering, and the largest worldwide since 2001, raising more than $8 billion for the bank.

Many analysts have derided China's banking system as corrupt and backward. Kenny Tang is associate director of the Hong Kong financial services provider Tung Tai Securities. He says taking banks public is an important step towards Chinese banking reform.

"Most of the mainland banks are government held," he said. "If they want to increase the transparency and improve public governance, then I think you should introduce some strategic investors, especially overseas investors, and also let the company go public."

Chinese search engine Baidu issued its first quarterly earnings report since going public in August, reporting net profit of $1.1 million for the third quarter of the year. That was nearly three times as high as earnings in the same period a year earlier. But due to higher-than-expected expenses, profit was still lower than investors were looking for, and the stock price fell 15 percent.

Baidu is the leader in China's fast growing Internet search market. It commands more than one-third of all traffic among China's more than 100 million Web surfers.

South Korea's two largest automakers, Hyundai Motor and its affiliate Kia Motors, posted weak third-quarter results. Hyundai's profit was down more than 12 percent compared with a year earlier. The company blames the shortfall on a labor strike last month and seasonal factors. Kia Motors's net fell by nearly half from a year ago. The company says its earnings were hit by foreign exchange losses, higher costs and labor problems.

Sacombank, Vietnam's largest semi-private bank with registered capital of about $80 million, has become the first bank in the communist nation to be given permission to list on the local stock exchange.

The Ho Chi Minh City bank has three foreign shareholders - Australia's ANZ Bank, Dragon Capital from Britain and the World Bank's International Finance Corporation. The Vietnamese government owns less than one percent.