Guanshen Railway (GSH)

[Investorman]

Just in case you had any doubt that Buffett knew what he was doing when he bailed out of PetroChina a few months ago......

PetroChina's Shanghai shares fall 7.7 percent early Tuesday; market cap below US$1 trillion

By ELAINE KURTENBACH
AP Business Writer
The Associated Press
updated 9:16 p.m. MT, Mon., Nov. 5, 2007

SHANGHAI, China - Chinese oil and gas giant PetroChina remains the world's largest business by market capitalization. But its status as the first US$1 trillion ??690 billion) company was short-lived.

A day after its debut in Shanghai, PetroChina Co.'s shares fell 7.7 percent in early trading to 40.58 yuan (US$5.53; ??3.82) apiece.

PetroChina became the first company with a US$1 trillion market capitalization when its 4 billion shares nearly tripled in value Monday over their initial public offering price. The IPO raised 66.8 billion yuan ($8.94 billion; ??6.2 billion) _ a record for a mainland exchange.

The buying frenzy was brief, though, and limited to Shanghai.

Overnight on Wall Street, PetroChina's New York-listed shares fell US$32.96, or 13 percent, to close at US$222.10. In Hong Kong, where the company is also traded, share values at HK$17.54 are down 11 percent since Friday's close.

Based on those values, and Tuesday's share price in Shanghai of 40.58 yuan, the company's market capitalization would be about US$930 billion (??641 billion).

That's still by far the world's largest: No. 2 Exxon Mobil Corp. is valued at US$488 billion (??337 billion).

However, even that reduced figure may not represent the true value of PetroChina, some analysts warn.

The Shanghai shares, which represent only 2.18 percent of the company's total outstanding shares, are meant for domestic investors and are generally off-limits to would-be foreign buyers. Chinese investors likewise have limited access to overseas-traded shares, crimping the leeway for arbitrage between the markets.