Wednesday, October 24, 2007 3:18:10 PM
HELP !!!...I'm confused (no comment, plz
Can you help me......when (this example) PTR launches this IPO....does it IMPACT the stock price on NYSE listing ie. take potential dollars OUT and add volatility / reduce liquidity on U.S. market ?
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UPDATE 2-PetroChina's Shanghai IPO to raise up to $8.9 bln
Wed Oct 24, 2007 10:48am EDT
(For an expanded IPO diary, please click CN/IPOMENU) (Rewrites with world's largest IPO, details, analysis)
By Tom Miles and Andrew Torchia
HONG KONG/SHANGHAI, Oct 24 (Reuters) - PetroChina (0857.HK: Quote, Profile, Research) said on Wednesday that it would raise as much as $8.92 billion in its initial public offer of shares in Shanghai, which is expected to be the world's biggest IPO so far this year.
China's largest oil and gas producer set an indicative price range of between 15 and 16.7 yuan for its offer of up to 4 billion new local currency A shares, or 2.2 percent of its expanded share capital.
The range, which is lower than many fund managers expected, means the company will raise 66.80 billion yuan if the offer is priced at the top of its range, as Chinese IPOs usually are.
That would edge out this year's current IPO record, also held by a Chinese company. Coal producer China Shenhua Energy (601088.SS: Quote, Profile, Research) (1088.HK: Quote, Profile, Research) raised 66.58 billion yuan in a Shanghai offer last month.
The huge sums being raised by IPOs in China contrast sharply with slumping demand for new shares in developed markets, which have been hit by the U.S. subprime mortgage crisis.
Russia's UC Rusal, the world's top aluminium producer, last month decided to shelve a plan for a $9 billion IPO in London because of concern about the global liquidity crunch.
In China demand for fresh equity remains massive because of strong economic growth and a stock market bull run that has pushed Shanghai's main index (.SSEC: Quote, Profile, Research) up fivefold since the start of last year, drawing millions of new investors into the market.
RECORD SUBSCRIPTIONS EXPECTED
Fund managers say PetroChina's offer is expected to draw a record amount of subscriptions from instititutional and retail investors on Thursday and Friday. The firm has said it expects to list in Shanghai on Nov. 5.
Investors raising funds for the offer have caused a vicious squeeze in China's money market, boosting short-term rates to multi-year highs this week.
The price range represents a discount of between 11 and 20 percent to Wednesday's HK$19.40 close of PetroChina's Hong Kong-listed H shares, which have gained 76 percent this year.
The A shares of dual-listed Chinese companies generally trade at big premiums to their H shares.
The A shares of fellow oil giant Sinopec (600028.SS: Quote, Profile, Research), which jumped 9.38 percent on Wednesday in anticipation of PetroChina's offer, are more than double the price of its H shares (0386.HK: Quote, Profile, Research).
The discount of PetroChina's IPO price range to its H shares is in line with recent discounts for other big Chinese equity offers. But many fund managers had expected a higher price range of near 18 yuan.
They said Chinese regulators may have pressed PetroChina to lower the price range in an effort to avoid driving stock valuations up too high.
"This may be lower than some forecasts but regulators often interfere with pricings if they think they're too high. The government doesn't want to see the market heat up too much," said Huang Yan at Guotai Fund Management in Shanghai.
VALUATIONS
But Chinese brokerage Ping An Securities estimated in a report this week that PetroChina's A shares could surge to 39.50-43.45 yuan on listing day.
That could make PetroChina the world's largest integrated oil and gas firm by market capitalisation. Its current Hong Kong share price gives it a capitalisation of US$449 billion, in second place behind Exxon Mobil (XOM.N: Quote, Profile, Research) with $504 billion.
A listing price of 43.45 yuan would give PetroChina a price/earnings ratio of 55 times based on projected 2007 earnings, Ping An said. Exxon Mobil shares are now priced at about 13 times forecast profits.
A senior portfolio manager at a major Chinese fund house said that regardless of sky-high valuations, many mutual funds would subscribe to the offer because China's market was still driven more by an ample supply of money than by fundamentals.
"I really don't understand why China's resource firms should command such high premiums to their overseas peers," he said. "PetroChina, like its foreign counterparts, sells its crude oil at international market prices and it does not hold any advantage in terms of reserve replacement."
PetroChina has said it needs a total of 37.8 billion yuan for five projects to develop oil fields, upgrade technology and expand ethylene production capacity. Surplus proceeds from its offer will be used to supplement working capital. ($1=7.49 yuan) (With additional reporting by Samuel Shen, Charlie Zhu and Judy Hua)
Can you help me......when (this example) PTR launches this IPO....does it IMPACT the stock price on NYSE listing ie. take potential dollars OUT and add volatility / reduce liquidity on U.S. market ?
---------------------------------------------------------
UPDATE 2-PetroChina's Shanghai IPO to raise up to $8.9 bln
Wed Oct 24, 2007 10:48am EDT
(For an expanded IPO diary, please click CN/IPOMENU) (Rewrites with world's largest IPO, details, analysis)
By Tom Miles and Andrew Torchia
HONG KONG/SHANGHAI, Oct 24 (Reuters) - PetroChina (0857.HK: Quote, Profile, Research) said on Wednesday that it would raise as much as $8.92 billion in its initial public offer of shares in Shanghai, which is expected to be the world's biggest IPO so far this year.
China's largest oil and gas producer set an indicative price range of between 15 and 16.7 yuan for its offer of up to 4 billion new local currency A shares, or 2.2 percent of its expanded share capital.
The range, which is lower than many fund managers expected, means the company will raise 66.80 billion yuan if the offer is priced at the top of its range, as Chinese IPOs usually are.
That would edge out this year's current IPO record, also held by a Chinese company. Coal producer China Shenhua Energy (601088.SS: Quote, Profile, Research) (1088.HK: Quote, Profile, Research) raised 66.58 billion yuan in a Shanghai offer last month.
The huge sums being raised by IPOs in China contrast sharply with slumping demand for new shares in developed markets, which have been hit by the U.S. subprime mortgage crisis.
Russia's UC Rusal, the world's top aluminium producer, last month decided to shelve a plan for a $9 billion IPO in London because of concern about the global liquidity crunch.
In China demand for fresh equity remains massive because of strong economic growth and a stock market bull run that has pushed Shanghai's main index (.SSEC: Quote, Profile, Research) up fivefold since the start of last year, drawing millions of new investors into the market.
RECORD SUBSCRIPTIONS EXPECTED
Fund managers say PetroChina's offer is expected to draw a record amount of subscriptions from instititutional and retail investors on Thursday and Friday. The firm has said it expects to list in Shanghai on Nov. 5.
Investors raising funds for the offer have caused a vicious squeeze in China's money market, boosting short-term rates to multi-year highs this week.
The price range represents a discount of between 11 and 20 percent to Wednesday's HK$19.40 close of PetroChina's Hong Kong-listed H shares, which have gained 76 percent this year.
The A shares of dual-listed Chinese companies generally trade at big premiums to their H shares.
The A shares of fellow oil giant Sinopec (600028.SS: Quote, Profile, Research), which jumped 9.38 percent on Wednesday in anticipation of PetroChina's offer, are more than double the price of its H shares (0386.HK: Quote, Profile, Research).
The discount of PetroChina's IPO price range to its H shares is in line with recent discounts for other big Chinese equity offers. But many fund managers had expected a higher price range of near 18 yuan.
They said Chinese regulators may have pressed PetroChina to lower the price range in an effort to avoid driving stock valuations up too high.
"This may be lower than some forecasts but regulators often interfere with pricings if they think they're too high. The government doesn't want to see the market heat up too much," said Huang Yan at Guotai Fund Management in Shanghai.
VALUATIONS
But Chinese brokerage Ping An Securities estimated in a report this week that PetroChina's A shares could surge to 39.50-43.45 yuan on listing day.
That could make PetroChina the world's largest integrated oil and gas firm by market capitalisation. Its current Hong Kong share price gives it a capitalisation of US$449 billion, in second place behind Exxon Mobil (XOM.N: Quote, Profile, Research) with $504 billion.
A listing price of 43.45 yuan would give PetroChina a price/earnings ratio of 55 times based on projected 2007 earnings, Ping An said. Exxon Mobil shares are now priced at about 13 times forecast profits.
A senior portfolio manager at a major Chinese fund house said that regardless of sky-high valuations, many mutual funds would subscribe to the offer because China's market was still driven more by an ample supply of money than by fundamentals.
"I really don't understand why China's resource firms should command such high premiums to their overseas peers," he said. "PetroChina, like its foreign counterparts, sells its crude oil at international market prices and it does not hold any advantage in terms of reserve replacement."
PetroChina has said it needs a total of 37.8 billion yuan for five projects to develop oil fields, upgrade technology and expand ethylene production capacity. Surplus proceeds from its offer will be used to supplement working capital. ($1=7.49 yuan) (With additional reporting by Samuel Shen, Charlie Zhu and Judy Hua)
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