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PetroChina opts for top of range
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The nation's largest oil and gas producer PetroChina has priced its A-share offer at the top of the indicative range, it told the Shanghai Stock Exchange yesterday.


The share price was set at 16.7 yuan apiece, which would raise 66.8 billion yuan for the company. That would top the record 66.58 billion yuan raised by China's largest coal producer Shenhua Energy to become the country's largest initial public offering (IPO).


The company has attracted a record 3.37 trillion yuan in subscriptions, surpassing those of Shenhua, which drew 2.66 trillion yuan in subscriptions.


"The offer price is within our expectations, as many institutional and retail investors rushed for the subscription," said Gui Haoming, an analyst at Shenyin Wanguo Securities.


PetroChina has frozen 2.57 trillion yuan in online subscriptions and 199.2 billion yuan in offline subscriptions, according to the statement to the stock exchange. The company will use the IPO proceeds to fund oil exploration and expansion.


Unsuccessful subscriptions will be refunded today, and that's expected to fuel the stock market, analysts said.


PetroChina's H shares rose 0.8 percent to close at 19.78 yuan yesterday, an 18 percent premium on its A-share offer price.


"The small gap between the company's A-share and H-share prices is expected to widen when trading begins," said Gui. PetroChina's A shares are expected to begin trading on the Shanghai Stock Exchange next Monday.


A shares had an average 162 percent premium over H shares on Tuesday, according to HIS Services Ltd.


PetroChina posted 105.9 billion yuan in profit for the first half of this year, with earnings per share of 0.42 yuan.


"Strong demand for oil and gas in China's fast-growing economy will continue to push the industry upward," said Fu Yunfeng, an analyst at Ping An Securities.


PetroChina's natural gas output and reserves accounted for 75 and 85 percent of the nation's total.


(China Daily October 31, 2007)



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