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Financial Times: PetroChina becomes world’s first $1,000bn company after debut

By Geoff Dyer in Shanghai and Francesco Guerrera in New,York
Published: November 6 2007 02:00 | Last updated: November 6 2007 02:00

PetroChina became the first company in the world to be valued at more than $1,000bn yesterday after a dramatic stock market debut in Shanghai that saw its shares surge by 163 per cent.

The huge jump in the company’s share price, which surprised analysts, gave the state-controlled oil group a market value of more than double its nearest rival, Exxon Mobil, which was worth $488bn at the close of trading on Friday in New York.

At yesterday’s closing price, PetroChina – China’s largest oil and gas producer – was valued at more than Exxon and Royal Dutch Shell combined.

The massive demand for the $9bn PetroChina offering, the biggest in the world so far this year, is the latest sign of the stock market frenzy in mainland China over two years, where shares have increased nearly sixfold.

The surge in share prices means three of the five most valuable companies in the world are now Chinese – PetroChina, China Mobile and Industrial and Commercial Bank of China – while two are from the US: Exxon Mobil and General Electric.

Part of the jump in PetroChina’s shares was attributed to the company’s decision to sell only 2.2 per cent of its expanded share capital. The small free float failed to satisfy huge investor demand and triggered a wave of buying on the first day of trading.

The PetroChina news caused concern among senior figures in corporate America.

“The concern is: can we maintain our ability to compete and innovate?” said John Castellani, president of the Business Roundtable, which groups some 200 of the largest US companies. “Competition from PetroChina is a reminder to Congress and the administration that they need to help US companies to be the most competitive in the world.”

But others argued that PetroChina’s performance was a further sign that a dangerous bubble was developing in the mainland stock market.

The company’s mainland shares are trading at a premium of about 150 per cent to its Hong Kong shares. “It is very worrisome,” said Yiping Huang, economist at Citigroup in Hong Kong.

The company’s shares closed up in Shanghai at Rmb43.96.

But in New York, PetroChina’s American depositary receipts fell 10 per cent in early trading after Bear Stearns said they were too expensive compared with rivals.

Copyright The Financial Times Limited 2007 and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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