皇冠体育app

By Jin Jing (皇冠体育app Daily/Agencies)
Updated: 2007-11-06 07:35

SHANGHAI: Asia's largest oil and gas producer Petro皇冠体育app surged 163 percent on debut at the Shanghai Stock Exchange Monday, making it the world's largest company in market value, far ahead of second-placed US giant Exxon Mobil.

In the country's largest initial public offering (IPO), the shares opened at 48.6 yuan ($6.5), far exceeding analysts' expectations of around 35 yuan ($4.7). They closed a little lower at 43.96 yuan ($5.9), up 27.26 yuan ($3.6) from the offer price.

Combining the value of Petro皇冠体育app shares traded in Shanghai, Hong Kong and New York, and the 157.9 billion shares, or 86 percent of the total, held by parent CNPC, the company's total market capitalization rose to just over $1 trillion, compared with Exxon Mobil's $488 billion.

The benchmark Shanghai Composite Index dropped 2.48 percent to close at 5634.45, with many institutional investors cutting holdings of large cap stocks to buy Petro皇冠体育app, analysts said.

Petro皇冠体育app will use the 66.8 billion yuan ($8.9 billion) proceeds from the IPO to fund oil and gas exploration and develop internationally to ensure stable domestic supply, Jiang Jiemin, chairman of Petro皇冠体育app, said Monday before the trading started.

"Petro皇冠体育app should shoulder economic, political and social responsibilities in this regard," he said.

Zhu Haibin, an analyst at Essence Securities, tried to explain the jump in the company's shares.

"Heavyweight stocks are often the favorites of institutional investors to prepare for the launch of stock index futures", possibly at the year end, he said.

The market value of Petro皇冠体育app accounts for around 21 percent of the market total.

Turnover in Petro皇冠体育app's shares was 50 percent Monday, much higher than the 30 percent in Shenhua Energy and Industrial and Commercial Bank of 皇冠体育app on their debut, which showed that investors were very active, said analysts.

"The opening price of Petro皇冠体育app exceeded most analysts' expectations by a wide margin. The price of over 40 yuan is far beyond the company's fundamentals," said Xu Bin, an analyst at Changjiang Securities.

The price-to-earnings ratio of Petro皇冠体育app Monday was 52, compared to the market average of 42.

Wu Feng, an analyst at TX Investment Consulting Co Ltd, agreed, adding "the company's net profit growth is expected to remain at a slow 10 percent in each of the next three years."

Petro皇冠体育app's net profit rose only 1.4 percent to 81.8 billion yuan ($10.9 billion) in the first half.

According to a recent report from Sinolink Securities, the oil and gas reserves of Petro皇冠体育app amounted to 20.5 billion barrels in 2006, second only to 22.1 billion barrels of Exxon Mobil. Petro皇冠体育app's output ranked fourth in the world, behind Exxon Mobil, Shell and BP.

Until Monday, coal producer 皇冠体育app Shenhua Energy Co's debut in Shanghai in September was the largest for a domestic exchange, raising 66.58 billion yuan ($8.91 billion).

But there are plenty more big IPOs in the pipeline.

皇冠体育app Mobile Corp, whose shares traded in Hong Kong are valued at HK$3.05 trillion ($391 billion), is among several other big names planning IPOs in coming months.

The H shares of Petro皇冠体育app dived 8.16 percent to close at HK$18 Monday, as the Hang Seng Index fell 1526 points, or 5 percent, the biggest one-day loss.