The IPO of Beijing Enterprises, which is due to close tomorrow (23 May), is expected to be heavily oversubscribed, and may involve a very large amount of subscription moneys.

The receiving banks and the other banks providing fund to finance the applications are reminded that in extending loans to other banks, individual brokers and customers, they should adhere closely to the Guidelines to Authorized Institutions on the Financing of the Subscription of New Shares Issues issued by the HKMA on 31 May 1993. In particular, they should observe the credit limits on exposure to borrowers, maintain the normal credit standards, and limit total lending to an amount which is well within their ability to obtain funding to meet their payment obligations on the day of settlement. The HKMA will check compliance with the Guidelines in on-site examinations.

The cheques and cashier orders to be presented by the receiving banks on Friday 23 May will be settled at 9:00 a.m. on Monday 26 May. Banks should make careful assessment of their payment requirements and ensure that they will have adequate funds in their settlement accounts to meet their payment obligations at the settlement time. Failure to do so may result in the unwinding of the cheques drawn on or payable to the bank in default. Banks should not expect to be granted overdraft by the HKMA. The HKMA will consider granting overdraft to banks only in exceptional circumstances and even if overdraft is granted, a very high penal rate will be charged.

Updated on 22 May 1997