Others News
- PetroChina A shares more than double
Date: 6-Nov-2007 Sources: (Shenzhen Daily)
SHARES in PetroChina more than doubled in their market debut yesterday after raising US$9 billion in the world's biggest initial public offering (IPO) this year, surging past analysts' expectations as China's top producer enjoys soaring crude prices.
The strong debut gave PetroChina a market value of around US$1 trillion, double the world's second-biggest company, rival oil giant Exxon Mobil, at US$488 billion, although only 2 percent of its shares are traded on the Shanghai market.
Shares in PetroChina leapt to close at 43.96 yuan (US$5.81) in Shanghai, up 163.2 percent from their IPO price and far above analysts' forecasts of around 35 yuan, underscoring investor confidence in China's red-hot economy and PetroChina's status as its biggest oil and gas producer.
But the massive demand for PetroChina shares was partly due to wild speculation that has gripped China's stock market during a bull run that began last year, analysts said. That could hurt the stock and the overall market later on.
'The opening price is really too high as far as PetroChina's corporate fundamentals are concerned,'said industry analyst Wang Jing at Orient Securities in Shanghai, adding that many investors were piling into the stock as a short-term trade rather than a long-term investment.
Analyst Dong Yong at Haitong Securities said the surge in global oil prices, which hit an all-time high above US$96 a barrel in New York last week, was good news for PetroChina so far.
'But in China, the oil sector is controlled by the State, and if the government chooses not to raise prices of oil products, high crude oil prices will actually become negative for PetroChina, which also has large refining operations,'he said.
'So investors have been too optimistic in pricing PetroChina at such a high level on its debut.'
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