PetroChina's shares bucked the sharp downward trend in Hong Kong today. The Hang Seng Index finally closed down 3.7%, but Petrochina only closed down 0.85% and even traded up during large periods intra-day. Could the company's announcement that it now expects to finally list on the domestic Chinese Shanghai stock market on Nov. 5th have something to do with its steady performance? If the old adage "buy the rumor, sell the news" holds, PetroChina's stunning performance may be set to slow after Nov. 5th.
Sole listed Hong Kong H-shares that have pursued domestic China A-share listings have performed well as investors expect the higher valuations in the A-share market to exert an upward pull on the corresponding H-share. PetroChina's recent stunning performance (up almost 80% in the last two months) has propelled it to the second largest market capitalization in the world. If the expectation of a well-received A-share listing has been driving the stock upwards, then a pause in the company's upward rise might be expected after the A-share listing becomes a reality.
More from PetroChina's press release (which can be found here) below:
The Company has on 19 October 2007 obtained the CSRC’s approval on the application of the Company to proceed with the A Share Issue. The A Share Issue will comprise the issue of not more than 4 billion A Shares.
Pursuant to the requirements of the applicable PRC laws and regulations, the Company and the joint sponsors (lead underwriters) of the A Share Issue will conduct preliminary market consultation with price consultation parties from 22 October 2007 to 24 October 2007 (both days inclusive) in the PRC in order to determine the offer price range.