Stocks News
- Shenhua up 87% in Shanghai debut
Date: 10-Oct-2007 Sources: (Shenzhen Daily)
SHARES of China Shenhua Energy, which raised a record US$8.9 billion in the nation's largest initial public offering (IPO), jumped 87.35 percent on their trading debut on the Shanghai bourse yesterday.
The country's largest coal producer saw its stock open at 68.00 yuan (US$9.05), up from its initial offer price of 36.99.
'The opening price is within my expectations but I'm still not completely satisfied,'Shenhua chairman Chen Biting, said at the opening bell ceremony at the exchange.
Shenhua Energy, already listed in Hong Kong, raked in net proceeds of 65.98 billion yuan from its mainland (IPO), exceeding China Construction Bank's 57.12 billion yuan IPO in September.
The largest offer of the year saw the firm sell 1.8 billion A shares at 36.99 yuan, a price at the top of its indicated range and 44.76 times the company's diluted earnings for 2006.
Chen added that he expected to raise more money on the stock market in the future.
'Within the next two or three years all of the companies' shares will be traded on the stock market,'he added.
Shenhua said in its IPO prospectus that the proceeds would be used to expand operations, upgrade mines and railways and make acquisitions abroad.
Share listings in China usually attract intense speculative interest, but Wang Ye, an analyst at Beijing-Based CITIC Securities, said that the firm's solid position in coal and related industries was also an incentive to buy.
'The price is largely driven by investor enthusiasm for the company and its broad reach as the largest coal producer in China. It also has a large scope of business including railway, power and ports,'said Wang.
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