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Foreign investors optimistic on Guangshen Railway |
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Written by Administrator
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Thursday, 03 August 2006 |
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BEIJING, August 3 (InfoChina) – As Guangshen Railway Co., Ltd. (NYSE: GSH, HK: 0525) is on the way of its initial public offering on China’s A-share market, foreign investors believe there is little room for Guangshen Railway’s stock price to fall further on the Hong Kong stock market.
As a result, many foreign strategic investors increased their holdings in Guangshen.
JP Morgan Chase Bank (JPM) bought in 2.072 million shares on July 28 to bring up its holdings from 4.79% to 5.12% at an average price of 3.11 yuan, indicating its confidence in Guangshen.
The investment bank once hold more than 5% of the railway, but it later cut the rate to 4.79%.
Other foreign investors such as Merrill Lynch and HSBC Halbis Partners (HK) Ltd. also increased their holdings in Guangshen. Merrill Lynch increased its shareholding by more than 2% in May-June to raise its total share up to 7.14%.
Guangshen Railway plans to make an IPO on domestic stock market by the yearend by issuing 2.75 billion shares, aiming to raise 8-10 billion yuan for the purchasing of Guangzhou-Shiping Railway, a section of Beijing-Kowloon Railway, from its parent company.
This project has got support from the Ministry of Railways, which also permits Guangshen Railway to uplift passengers and cargo transport charges of this section by 20-50%.
Analysts explained that if Guangshen successes in issuing A-shares and completes acquisition of Guangzhou-Shiping Railway by earlier 2007, it is expected to double Guangshen’s profit to reach nearly 900 million yuan in 2007.
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China Stock News