STOCKWATCH: Intl Bank of Asia sharply higher on M&A expectations

HONG KONG (AFX-ASIA) - International Bank of Asia shares were sharply higher on expectations the bank will become the next target of merger and acquisition activity by foreign banks amid the current round of banking consolidations, dealers said.	    They said the stock has been lagging behind other small and medium bank stocks and the M&A hopes have sparked buying in an attempt to narrow the price gap with other banks.	     At 11:53 am, IBA rose 0.15 hkd or 6.89 pct to 2.325 on volume of 18.14 mln shares, while the Hang Seng financial sub-index was down 307.51 points at 20,763.64.	    The Hang Seng index was down 89.39 points at 13,358.74 on turnover of 3.16 bln hkd.	    Bonnie Lai, a banking analyst with Core Pacific-Yamaichi International, said DBS Bank's takeover of Dao Heng Bank has stirred up large buying interest in small and medium banks.	    "After other small- and medium-sized banks were higher (over) the past couple of weeks, market focus shifted to IBA, a market laggard," Lai said.	    HKCB Bank was down 0.063 at 3.725, CITIC Ka Wah Bank was up 0.025 at 2.50, Wing Hang Bank was up 0.70 at 30.20, Wing Lung Bank was up 0.10 at 36.30 and Dah Sing Financial was up 0.30 at 41.10.	    "Compared with its book value of about 2.9 hkd per share, there is room for IBA's share price to grow if the M&A speculation continues," Lai said.	    However, Lai said she prefers Wing Hang Bank, Wing Lung Bank and Dah Shing to IBA.	    "IBA's growth potential is not as high as Wing Hang, Wing Lung and Dah Shing, although IBA has made improvements in bad loan reductions," Lai said.	    Lai said as long as hopes about further mergers and acquisitions remain, small and medium banks will remain volatile. 

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