REFILE-UPDATE 1-China’s Sinohydro rises 10 pct in Shanghai debut
* Sinohydro $2.1 bln IPO is biggest in mainland so far in
2011* Bodes well for upcoming major IPOsBy Soo Ai Peng and Samuel ShenSHANGHAI, Oct 18 (Reuters) - Shares of Chinese dam builder
Sinohydro Group rose as much as 10 percent on their
Shanghai debut on Tuesday, after it raised $2.1 billion in the
mainland’s biggest IPO so far this year, boding well for future
mega-IPOs.Shares in the builder of the Three Gorges Dam opened at 4.78
yuan and extended gains to as high as 4.95 yuan, compared with
its IPO price of 4.50 yuan. Many analysts had expected the
shares to hover around the IPO price on their first day of
trading.”It shows that the market can still digest big IPOs and it’s
a good sign for other mega IPOs in the pipeline,” said Chen Yi,
an investment adviser with the sales department of Xiangcai
Securities in Shanghai.The firm performance of Sinohydro shares also points to a
slightly firmer outlook for the Shanghai stock market’s
benchmark index . Beijing announced measures last week to
bolster banking stocks and support small- and medium-sized
enterprises (SMEs), helping trigger a rebound from
two-and-half-year lows.China’s stock market, which has fallen 13 percent so far
this year due to fears of an economic slowdown and the euro zone
debt crisis, has forced many Chinese companies to postpone or
downsize their IPOs. Weakness in the Hong Kong stock market has
also pushed back some firms’ fundraising plans.In one of the most high-profile cases, Sany Heavy Industry
Co last month postponed its plan to raise as much as
$3.3 billion via a Hong Kong listing.Sinohydro braved the weaker market, but slashed the size of
its IPO by a fifth in response to weak investor demand, pricing
the offer at the bottom of an indicative range and raising 13.5
billion yuan ($2.1 billion) last month, compared with an
original target of up to 17.3 billion yuan.Sinohydro’s encouraging debut performance bodes well for
upcoming major IPOs, including those from China Communications
Construction Co , Shaanxi Coal Industry and New China
Life.China Communications Construction, the country’s biggest
port builder, plans to raise 20 billion yuan in a Shanghai IPO,
while coal miner Shaanxi Coal also plans to raise about 17.3
billion.Sinohydro, the builder of the Three Gorges Dam, the world’s
largest hydropower project, has said it plans to use the IPO
proceeds to upgrade its machinery, invest in some green energy
projects and supplement working capital.China Securities Co and Bank of China International were
lead underwriters for the offer.
($1 = 6.371 Chinese Yuan)
