HONG KONG (AP) - Shares of China Construction Bank Corp. - the world's biggest initial public offering this year - made a lukewarm debut on Hong Kong's stock exchange Thursday because the IPO's price left little room for quick gains, analysts said.

Many viewed the $8-billion-US IPO, the world's largest since Kraft Foods Inc. went public in 2001, to be a major step in China's campaign to clean up its debt-ridden financial system - long off-limits to foreign investors.

Thursday's tepid reception was mostly due to the IPO's price, which provided little opportunity for a fast speculative gain, said Howard Gorges, director of South China Holdings Ltd. in Hong Kong.

Agnes Deng, a fund manager at Standard Life Investments in Hong Kong, added that fund managers saw little upside in the stock in the short term because the shares were already close to fair valuation.

"I think the market is the market. There's supply and demand. Many factors determine price. I think stable trading would be very ideal," Guo told reporters at an IPO celebration.

The bank, known as CCB, has assets worth 4.22 trillion yuan ($521 billion US), 14,250 branches and commands a 13 per cent share of total deposits in China.

Many foreign banks are rushing to get a piece of the massive Chinese banking market, where a huge population of big savers is just starting to get hooked on mortgage loans and credit cards.

One of the biggest CCB investors is Bank of America, which has spent $3 billion US stake to buy a nine per cent stake in the institution - the largest single purchase of stock in a Chinese bank by any foreign bank.

Investors are betting that China is serious about cleaning up big banks like CCB. Beijing has been pouring state money into the banks, cleaning up balance sheets full of ill-advised loans to rusty state-owned enterprises that were unlikely to pay back the money.

Now Beijing hopes foreign investors will bring management expertise that will modernize the banks and keep them from drifting back into insolvency.

One of the big risks is that the civil servants still running the banks, which Beijing has refused to privatize, won't listen to foreign advice.

The banks could also be rocked by a major economic downturn. They've loaned heavily to the red-hot property market, which some fear is a bubble waiting to burst.

Corruption is another worry. CCB's former chairman, Zhang Enzhao, resigned seven months ago for what the bank said were "personal reasons," though reports later said he was named in a lawsuit in California for allegedly taking bribes.

Gorges, of South China Holdings, noted that CCB has suffered from poor management and bad lending decisions, but he said it has been restructuring and its outlook seems optimistic.

"The management should be more disciplined and motivated to make the bank more successful in the future," he said. "So in the long-term, it should be all right, but that also assumes in the next year or two, we don't find they haven't yet managed to change their management controls and policies as much as we all hoped."

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