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Chongqing Water shares make big splash
By Wang Weini |
March 30, 2010, Tuesday
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Print Edition
Print Edition
CHONGQING Water Group soared more than 70 percent from its initial public offering price yesterday in Shanghai as it was boosted by strong investor interest in the water industry which is seen to benefit from government infrastructure spending.
Shares of the biggest water supply and treatment company in Chongqing soared 73.35 percent to 12.10 yuan (US$1.77), beating market consensus of between 8 and 10 yuan.
The company issued 500 million shares, or 10.42 percent of its enlarged share capital, at 6.98 yuan each to raise 3.49 billion yuan. It will use the proceeds in new water projects, such as sewage treatment, in Chongqing and the Three Gorges reservoir.
"According to the latest plan, the country will spend an extra 29 billion yuan in water treatment projects in the Three Gorges, which will become a major growth point for Chongqing Water," said Essence Securities Co.
Meanwhile, the severe drought in southern China also attracted investors to take an interest in the water industry in anticipation of possible price increase for the resource and prospects for its growing value, analysts said.
Chongqing Water's strong gain on its debut beat sluggish first-day trading of blue chips this year.
Shares of the biggest water supply and treatment company in Chongqing soared 73.35 percent to 12.10 yuan (US$1.77), beating market consensus of between 8 and 10 yuan.
The company issued 500 million shares, or 10.42 percent of its enlarged share capital, at 6.98 yuan each to raise 3.49 billion yuan. It will use the proceeds in new water projects, such as sewage treatment, in Chongqing and the Three Gorges reservoir.
"According to the latest plan, the country will spend an extra 29 billion yuan in water treatment projects in the Three Gorges, which will become a major growth point for Chongqing Water," said Essence Securities Co.
Meanwhile, the severe drought in southern China also attracted investors to take an interest in the water industry in anticipation of possible price increase for the resource and prospects for its growing value, analysts said.
Chongqing Water's strong gain on its debut beat sluggish first-day trading of blue chips this year.
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