China XD shares debut weakly
By Winny Wang |
January 29, 2010, Friday
|
Print Edition
Print Edition
CHINA XD Electric Co shares fell 1.39 percent in Shanghai yesterday, the first time a Chinese mainland-listed company dropped below its offer price on its trading debut since 2006.
The nation's biggest maker of electricity transmission and distribution equipment closed at 7.79 yuan (US$1.14) per share yesterday below its offer price of 7.9 yuan. The Shanghai Composite Index gained 0.25 percent to 2,994.14.
New stocks are favored by investors as they always surge on their first day of trading. However, enthusiasm has cooled recently after the 8.64 percent tumble in the Shanghai stock index so far this year on concerns of an interest rate increase and tightened monetary policies.
One factor that could have led to the drop in China XD's price is the government's intention to tighten monetary policies, said Huang Xiangbin, an analyst at Cinda Securities Co.
China XD raised 10.3 billion yuan from its initial public offering, higher than its planned 7.72 billion yuan. It will use the proceeds in 22 technological transformation projects, research and development activities and to replenish working capital.
Orient Securities Co said in a report that China XD's share price should range between 7.3 yuan and 8.5 yuan, or a price/earnings ratio of between 23 and 27.
The nation's biggest maker of electricity transmission and distribution equipment closed at 7.79 yuan (US$1.14) per share yesterday below its offer price of 7.9 yuan. The Shanghai Composite Index gained 0.25 percent to 2,994.14.
New stocks are favored by investors as they always surge on their first day of trading. However, enthusiasm has cooled recently after the 8.64 percent tumble in the Shanghai stock index so far this year on concerns of an interest rate increase and tightened monetary policies.
One factor that could have led to the drop in China XD's price is the government's intention to tighten monetary policies, said Huang Xiangbin, an analyst at Cinda Securities Co.
China XD raised 10.3 billion yuan from its initial public offering, higher than its planned 7.72 billion yuan. It will use the proceeds in 22 technological transformation projects, research and development activities and to replenish working capital.
Orient Securities Co said in a report that China XD's share price should range between 7.3 yuan and 8.5 yuan, or a price/earnings ratio of between 23 and 27.
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