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Air China given the cold shoulder by domestic investors |
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Written by Administrator
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Monday, 07 August 2006 |
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BEIJING, August 7 (InfoChina) – Air China (HK: 0753)’s coming back to A share market receives the cold shoulder of domestic institutional investors, with actual subscription far lower than previously expected 1.175 billion yuan, Xinhua-run Shanghai Securities News reported.
Institutional investors, especially fund companies, believe the price of Air China’s A-share, 0.2 yuan lower than that of H-share, is too high for investors to make profit.
Air China is among a string of overseas-listed large-cap enterprises tasked to return home and squeeze bubbles out of domestic stock market with new IPOs. Despite that it is the only Chinese air company that reports profit in high-oil-price times, Air China was lukewarmly received by the market because general optimism about the airline sector.
Air China’s profitability, which has been falling over the past three years, is to be impaired further by the recently raised retail price of jet fuel by 290 yuan per ton. Though jet fuel surcharges are likely to be raised in October, that will spell only limited comfort.
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China Stock News