The global financial market has a new champ – PetroChina, which became the world’s largest company by market capitalization worth nearly one trillion dollars – double the value of ExxonMobil. PetroChina’s stock prices were trading at 48.62 yuan from IPO price of 16.7 yuan today, Monday 5th Nov 2007, an increase of over 190 percent. Its market capitalization shot past the 1.1 trillion dollar mark in early trade before profit-taking trimmed the company to slightly less than 1 billion mark.
Already listed in Hong Kong and New York stock exchange, the Asia’s top oil and gas producer made it’s entry to the Shanghai stock exchange after the largest IPO (initial public offering) ever in China. The IPO raised nearly nine billion dollars from the sale of four billion shares. The Chinese bourse surged 130 percent in 2006 and is already up by 110 percent this year with many companies trading at the risky and ridiculous 60 times earning.
PetroChina is still controlled by the state after the listing, holding 86 percent stake through parent China National Petroleum Corporation. In the latest salvo to the over-heating stock market, China’s Premier Wen JiaBao has warned that his government will do what’s necessary to prevent bubbles and fluctuation.
On the other hand, Hong Kong’s Hang Seng Index tumbled 3 percent or 915.56 points at 29,552.78 mainly due to comments from Wen JiaBao during the weekend to delay the mainland citizens from investing Hong Kong stocks directly. Wen said Beijing should pass a law to regulate outward fund flows from the mainland to minimize the shock to domestic stock markets, and examine how they might negatively impact the Hong Kong bourse. It appears the China’s Premier is aware of the bubble and sorry about it’s impact.
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November 5th, 2007 by financetwitter
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