Westpac falls short on share sale

Westpac sold $442 million worth of new shares to retail investors under a share purchase plan announced late last year, the bank said yesterday. The bank had said it was willing to sell up to $500 million.

In the second week of December Westpac sold $2.5 billion of shares to institutional investors at $16 a share and the share purchase plan was a chance for retail investors to also buy new stock at a notional discount.

In some ways the shortfall in the share purchase plan is moderate, but it might indicate a wariness on the part of retail investors toward investing in bank stocks. Bank of Queensland fell more than 50 per cent short on its recent effort to sell $100 million in new shares to retail investors.

Westpac's retail investors may be kicking themselves over their decision. The bank sold the shares at a price of $15.26. Thanks to CBA's upgrade of its profit forecast, published late on Monday, shares in Westpac leapt $1.09 to $16.40 on the ASX yesterday.