Analysts turn bullish on railway operator's H shares after A shares surge on first day of Shanghai trading
Shares of Guangshen Railway, the largest railway operator in southern China, surged as much as 80.85 per cent yesterday on their Shanghai debut as new domestic issues continue to race ahead.
The A shares of the railway operator, already listed in Hong Kong, closed the day up 64.1 per cent at 6.17 yuan after selling 39 per cent of its expanded share capital in its initial public offering at 3.76 yuan each to raise 10.34 billion yuan in the fourth-largest domestic IPO.
This comes two days after Hong Kong-listed Datang International Power Generation, one of China's largest electricity generators by output, saw its newly listed A shares jump 71 per cent on their Shanghai debut to 11.34 yuan in an IPO that raised 3.34 billion yuan. The strong debut sent its H shares up to a record high of HK$8.08 on Thursday before they slipped back 2.5 per cent yesterday to HK$7.88.
'It won't be surprising to see later on that Guangshen's H shares will rise in order to narrow the gap between them and the A shares,' Daiwa Institute transport analyst Rachel Tsang said.
The company's H shares shed 3.23 per cent to settle at HK$4.80 yesterday but they have gained 11.6 per cent for the week and more than doubled in value this year.
But analysts warned the surge in the A shares was mostly due to the market's bull run and has made the company much more expensive than its mainland rivals and the international standard.
