China Railway Group Ltd, the world's third largest and Asia's
top construction firm, is set to list in the Shanghai bourse today,
under the code 601390.SH.
Experts said it is unlikely China Railway's A-share debut will
stir the market.
Over 3.27 billion shares issued online by the Beijing-based
company will enter the A-share market today, while over 1.4 billion
shares sold to offline institutional investors are to circulate in
next three months.
China Railway is piloting dual listing of A shares first and H
shares second. The company's A-share initial public offering price
was 4.8 yuan per share, and in total 22.44 billion yuan (US$3.03
billion) was raised.
However, most Chinese investors have experienced difficulties in
the past six weeks, as the Shanghai Composite Index tumbled from a
high of 6,092 points to 4,803 points last Wednesday.
The combined market value of stocks on the Shanghai and Shenzhen
bourses fell 3.11 percent last week to 29 trillion yuan (US$3.92
trillion), according to statistics from stock exchanges.
As a result, analysts recommend caution regarding China Railway
shares. They said investors, amidst monetary tightening fears,
could loose steam.
PetroChina, boasting most profitable company in Asia, opened at
48.62 yuan per share on its November 5 debut, had fallen to 31.52
yuan per share as of November 30.
Han Qicheng, analyst of Guotai Junan Securities, believed China
Railway price is reasonable at between 5.89 yuan and 6.66 yuan
.
Offline institutional investors are also cautious. Over 25 fund
companies bade over 2.5 billion yuan on PetroChina's subscription.
By contrast, only 18 fund companies subscribed more than one
billion yuan on China Railway, according to the Beijing News.
China Railway's net profits this year will be no less than 3.142
billion yuan (US$424 million), almost double that of last year,
based on China Railway's most recent prospectus.
(Chinadaily.com.cn December 3, 2007)
