|
China Railway Construction trading debut fails to impress
2008-03-10
China Railway Construction, which raised 5.4 billion dollars in its initial public offering in Shanghai and Hong Kong, failed to impress in its domestic debut on Monday amid global stock jitters. The company, which built part of the controversial train line to Tibet and the track of Shanghai's super-fast magnetic levitation train, closed at 11.64 yuan (1.63 dollars), up 28.19 percent from its IPO price of 9.08 yuan. Its combined fund raising efforts in Shanghai and Hong Kong made it the globe's largest IPO this year, but analysts said its performance on its opening day in Shanghai was at the low-end of expectations. "It is the smallest rise in opening trade among stocks debuting on the market recently," said Cao Xuefeng, an analyst with West China Securities. Analysts said the overall weakness in global and domestic equity markets was to blame for the firm's comparatively lacklustre debut. The key Shanghai Composite index fell 154.22 points or 3.59 percent to 4,146.30 on Monday, continuing a slide of over 20 percent for the year. "Share supply appears to be outstripping demand this year. That is the main reason for a weak debut," Cao said. Investors in China have become accustomed to new shares jumping sharply on their first day of trade, even though the gains are more often speculative than a reflection of the company's actual worth. In November last year, PetroChina recorded one of the most spectacular trading debuts ever, as the nation's largest gas and oil group surged more than 160 percent, temporarily becoming the world's largest company. China Railway Construction's performance was also weaker than its main rival China Railway Group, which initially jumped 69 percent to 8.10 yuan in its Shanghai debut in December. China Railway Group closed 5.38 percent lower Monday at 8.62 yuan. Nevertheless, China Railway Construction had raised 21.73 billion yuan from its share offering in Shanghai after pricing the 2.45 billion shares at 9.08 yuan, the top end of an indicative range. The offering attracted about 3.1 trillion yuan of subscription funds, with the retail tranche 156 times oversubscribed and the institutional tranche 78 times oversubscribed. Investors had ploughed into it amid Chinese government plans to spend billions of dollars upgrading the nation's railway infrastructure. The firm is scheduled to debut in Hong Kong on March 13 after raising 18.25 billion Hong Kong dollars (2.34 billion dollars) from the sale of 1.706 billion shares at 10.7 Hong Kong dollars per share. The proceeds will help purchase construction equipment, fund the building of railway lines and a property project, and pay down loans.
|  | | | Profile |
News236 | Gallery | Links | |
| |
|
|
| 
