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- Merrill Lynch strategy report, February 2006
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:: Vietnam Stock Markets ::
HOSE - Ho Chi Minh Stock Exchange
HASTC - Hanoi Stock Trading Center
:: Vietnam Stock Brokers ::
Ho Chi Minh City Securities - HSC
:: Vietnam Funds ::
:: Vietnam Stock News ::
Petrochina became the first company with a market cap of over 1 Trillion dollars, eclipsing Exxon Mobil on its debut in Shanghai.
Of course the next day shares tumbled 9% as reality set in and profit taking took over.
This brought the giant below the $1 Trillion mark again but still values it at more than twice Exxon Mobil shares...
So Petrochina is the new world Top Dog by Market Cap. Driven by wild speculation in Shanghai that caused the IPO price there to almost triple the IPO price. Hmmm...
Talk about animal spirits!
Something a bit fishy in all this.
Hours after PetroChina shares almost tripled in value on their first day of trading in Shanghai, they slumped 11 percent in New York after a big investment bank said the stock was overvalued.
China's biggest oil and gas company _ the publicly listed unit of state-owned China National Petroleum Corp. _ became the world's first company with a $1 trillion market capitalization after its shares debuted Monday in its homeland.
The 4 billion new shares surged to 43.96 yuan ($5.90), nearly triple the IPO price of 16.70 yuan ($2.24). The initial public offering raised 66.8 billion yuan ($8.94 billion) _ a record for a mainland exchange.
The Shanghai 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.
The buying frenzy in China, though, didn't translate to Wall Street.
PetroChina's U.S. shares were off sharply Monday, falling $32.79, or 12.9 percent, to close at $222.27.
In a research note, Bear Stearns downgraded the shares to underperform, noting they were trading at a 51 percent premium to the investment bank's new year-end 2008 fair value and target price.
"PetroChina shares have risen 45.6 percent over the past month alone," Bear Stearns said. "Time to take profit."
Stay tuned for more silliness...
More on Petrochina
Oh and there's more...
Based on Wall Street consensus forecasts, PetroChina was trading at a 72 percent premium to Exxon Mobil based on a 2008 price-to-earnings valuation. "From an operational perspective, we see little reason for this disparity," the investment bank said.
When measured by earnings, Exxon remains a much larger company. Its $9.41 billion in third-quarter net profit, while down 10 percent from a year earlier, nearly matched PetroChina's net profit of 81.8 billion yuan ($10.8 billion) for the entire first half of the year.
Exxon's oil and gas reserves, a gauge of future profit potential, stood at 22.7 billion barrels by the end of 2006, compared with PetroChina's 20.5 billion barrels.
i.e. the company is grossly overvalued, which would help to explain why Warren Buffett sold all his shares:
The company's luster appears to have been undimmed by a decision by Berkshire Hathaway Inc.'s decision to sell off all its 2.3 billion PetroChina shares.
The company made about US$3.5 billion on the sale of that US$488 million investment, Berkshire Hathaway chairman and chief executive Warren Buffett has said in interviews.
Those crazy Shanghai speculators!