PetroChina surges past GE as world No 2 by market value

PUBLISHED : Tuesday, 16 October, 2007, 12:00am
UPDATED : Tuesday, 16 October, 2007, 12:00am

PetroChina, the mainland's top oil producer, has overtaken General Electric to become the world's second-biggest company by market value after its shares jumped 13 per cent yesterday to a record amid high oil prices and a surging Hong Kong stock market.

Shares in PetroChina gained HK$2.16 to close at HK$18.78, extending their two-month gain to 94.6 per cent. About HK$15.51 billion worth of shares changed hands, accounting for 8.9 per cent of the market's turnover.

Based on yesterday's closing price, PetroChina's market value was HK$3.36 trillion (US$430.77 billion), compared with General Electric's US$420.4 billion at Friday's close. Exxon Mobil Corp, the United States oil producer, is still the world's biggest firm with a value of US$518.46 billion.

'It's mainly driven by momentum trade, as investors found that oil stocks have been lagging among mainland plays in the recent bull run,' said DBS Vickers research director Gideon Lo. 'Unlike mainland consumption plays, it is hard to push a China growth story out of the oil stocks, given their limited output growth and price controls.'

Shares in two other mainland oil firms, China Petroleum & Chemical Corp (Sinopec) and CNOOC rose 13.68 per cent and 9.75 per cent respectively yesterday

The West Texas Intermediate crude oil price has surged 41.3 per cent in the past 12 months to as high as US$84.73 a barrel.

PetroChina's shares were also boosted by the surging Hong Kong market, as investors expected massive capital inflows after Beijing said it would allow mainland residents to buy Hong Kong-listed stocks directly.

Investors also snapped up PetroChina shares on hopes that the price would further be boosted by the company's proposed A-share listing in Shanghai.

Despite major stake disposals by Warren Buffett's listed flagship Berkshire Hathaway in the past three months, PetroChina shares have gained 124.3 per cent in the past year.

The stock last traded at 22.12 times this year's forecast earnings compared with 10.42 to 13.63 times of global oil giants Exxon Mobil, Royal Dutch/Shell and Total.

PetroChina yesterday also announced year-on-year growth of 4.3 per cent in oil and gas output to 828.1 million barrels of oil equivalent for the first nine months of this year.

Oil output climbed 0.9 per cent, with the realised price dropping 0.91 per cent to US$60.94 a barrel. Gas output jumped 16.8 per cent with the price rising 4.08 per cent to US$2.55 per thousand cubic feet.

Third-quarter oil and gas output rose 5.64 per cent year on year, outpacing the 3.66 per cent increase in this year's first half.

Separately, CNOOC chairman Fu Chengyu said parent China National Offshore Oil Corp planned next year to list its remaining unlisted assets whose value amounted to about 8 per cent of the group's assets, Bloomberg reported.