A share sale at Agricultural Bank of China - set to be the world's biggest initial public offering (IPO) - has begun in Hong Kong.

Retail investors have been queuing outside bank branches to pick up the AgBank prospectus. It will also float on the Shanghai market.

The bank, the last of China's so-called 'big four' to go public, aims to sell a 14% stake for $23bn (£15.3bn).

UK-based bank Standard Chartered has said it will invest $500m in the bank.

Qatar and Kuwait are already set to invest $3.6bn in the IPO.

Other likely investors include Singapore's sovereign wealth fund Temasek Holdings, Hong Kong businessman Li Ka Shing and Rabobank of the Netherlands.

The final share price for the IPO launch will be issued on 7 July.

David Fuller's view Heavy supply in the form of new IPOs has weighed on mainland China's stock market over the last year. I do not have the precise data but according to some reports, new IPOs in China, including Hong Kong, have been approximately twice as large as those in the USA, in terms of capitalisation. That is a lot of supply to absorb in a market where total equity capitalisation for China is $2.5 trillion (over $4.5 trillion if we include Hong Kong listings), compared to $12.5 trillion for the USA, according to Bloomberg.

Agricultural Bank of China is the latest and largest contributor to the great sucking sound in terms of liquidity. Institutional investors in China have no choice but to participate in this float, for political reasons in addition to portfolio weighting.

I maintain that the IPOs are the main factor behind the poor performance of mainland China's stock market over the last year. Yes, more important than the increased reserve requirements for China's banks. That liquidity tightening did not help the stock market but its main purpose was to curb property speculation.

Knowing the reasons behind a stock market decline seldom alleviates the pain for investors. One way or another, they have suffered due to more supply than demand. Nevertheless, China is reasonably valued relative to many other stock markets, particularly via the HSI and HSCEI listings in Hong Kong, as I detailed yesterday. In an uncertain world, I would back China's potential for growth in corporate profits ahead of most other countries over the medium to longer term. I also assume that China's government will want to float additional issues. It will certainly know that this is best done against the background of a firm stock market.