[Marxism] PetroChina Shares Surge On Debut in Shanghai
walterlx at earthlink.net
Mon Nov 5 10:32:38 MST 2007
November 5, 2007 4:27 a.m. EST
PetroChina Shares Surge
On Debut in Shanghai
November 5, 2007 4:27 a.m.
SHANGHAI, China -- Chinese energy conglomerate PetroChina Co.'s
shares tripled in value in its trading debut Monday in Shanghai, as
it surged past Exxon Mobil Corp. to become the world's most highly
valued company by market capitalization.
State-owned PetroChina, a unit of state-owned China National
Petroleum Corp., is the country's biggest oil and gas producer. Its
Shanghai initial public offering of four billion shares raised 66.8
billion yuan ($8.94 billion), a record for a mainland stock exchange.
Adding the values of PetroChina shares traded in Shanghai, Hong Kong
and New York, the company's total market capitalization had surged to
more than US$1 trillion, compared with Exxon Mobil Corp.'s US$488
billion. However, more than 85% the shares outstanding -- 157.9
billion shares -- are held by PetroChina's parent company CNPC and
are unlikely to trade in the market.
PetroChina's Shanghai-listed shares opened at 48.60 yuan Monday,
compared with the IPO price of 16.70 yuan. The shares ended at 43.96
yuan each, with the overall benchmark Shanghai Composite Index down
2.5% at 5634.45.
The stellar performance was expected: Shares in elite companies such
as PetroChina, which already trade in Hong Kong and New York, tend to
soar in their trading debuts given the strong appetite among Chinese
investors for highly valued companies.
Like other yuan-denominated Class A shares traded in China, the
PetroChina shares issued in Shanghai are meant for domestic investors
and aren't generally available to foreign buyers. They account for
2.18% of the company's enlarged share capital of 183.02 billion
"PetroChina's return to the A-share market is a result of the Chinese
economy's fast growth and surging energy demand," the company said in
a statement released Monday. "PetroChina's public offering will bring
renewed energy to domestic capital markets and also provide an
important investment indicator," it said.
Before PetroChina's IPO, coal producer China Shenhua Energy Co.'s
debut in Shanghai in September was the largest for a domestic
exchange, raising 66.58 billion yuan. The benchmark Shanghai
Composite Index has more than doubled in value this year as investors
have piled into the market, seeking higher returns than they can earn
on bank savings.
PetroChina's status as the world's most highly valued company by
market capitalization, doesn't necessarily reflect stronger
profitability or productivity. As of Friday, PetroChina's market
value was US$456.6 billion, with the value of its 21.09 billion
shares traded in Hong Kong at 413.54 billion Hong Kong dollars, or
about US$53 billion. At roughly 44.00 yuan a share in Shanghai, the
remaining 162 billion shares outstanding were valued at about US$956
billion. Added together, the company's market capitalization was more
than US$1 trillion.
The company has seen revenue soar amid surging oil prices but has
struggled to boost production from its aging domestic oil fields. In
refining, it has struggled with a widening gap between soaring world
crude oil prices and state-controlled prices for oil products in the
PetroChina reported that its first-half net profit rose 1.4% from a
year earlier on modest output growth, to 81.8 billion yuan, compared
with 80.7 billion yuan a year earlier.
Copyright C 2007 Associated Press
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