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Run of dud IPOs dims Chinese bank recapitalization plans

Investors give cold shoulder to debt-laden sector suffering $300bn shortfall

PSBC, which raised $4 billion when it floated in Shanghai on Tuesday, has China's largest branch network.   © Reuters

HONG KONG -- Chinese investors are giving the country's banks the cold shoulder after a series of dud share offerings, imperiling authorities' capital-raising plans for a sector that faces a $300 billion shortfall and needs to be healthy to drive economic growth.

The underwhelming performance of this week's $4 billion share offering from Postal Savings Bank of China (PSBC), Shanghai's biggest IPO this year, is the just the latest sign of festering problems in the debt-laden banking sector, which has lately seen authorities bail out several struggling lenders.

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