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CNOOC Defies Bleak Market to Soar in Shanghai Debut -Breaking

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© Reuters.

By Gina Lee

Investing.com – Chinese oil company CNOOC Ltd.’s shares in its debut on the Shanghai Stock Exchange (SSE (LON:)) on Thursday. In China’s eleventh largest public stock sale, the company raised CNY28.08 trillion yuan (4.38 billion).

After trading began at CNY12.96 (which was higher than the CNY10.8 offering price), stocks rose 28.8% ($2.18) to CNY13.91 ($2.18). After they reached the maximum daily price limit for new listings, the SSE declared abnormal fluctuations and suspended trading.

The company’s Hong Kong shares (HK:) fell 3.23% to HK$10.8 after hitting a daily high of HK$11.64 ($1.48).

Linus Yip, chief strategist at First Shanghai Group, stated that investors are chasing CNOOC (NYSE) because they want to find shelters in large caps with low valuations and high dividends.

“The stock also stimulates the market’s appetite during a period when oil prices rise and inflation accelerates.”

China’s biggest offshore oil producer will make use of the profits to finance one and seven projects in China, and replenish capital.

Cinda Securities analyst Chen Shuxian stated that CNOOC offers historic opportunities for investment due to its high oil prices and low valuation. In addition, CNOOC’s market capital has the potential of doubling over the next few decades.

The company’s debut comes amid a bleak market that saw an increasing number of stocks falling below initial public offering (IPO) prices. East Money Information reports that a third (or 100) of China’s listed companies in Shanghai and Shenzhen by 2022 were trading below their offer prices at the time. Both shares of chipmaker Vanchip Tianjin Technology Co. Ltd. and electronics company Rigol Technologies Co. Ltd. fell by over 30%, respectively.

In 2022, due to increased geopolitical tensions and the recent COVID-19 attack in China, the main benchmark stock market index fell 18%.

CNOOC’s Shanghai listing comes after it was delisted by the New York Stock Exchange in October 2021. Shanghai already lists Peers such as PetroChina Co. Ltd. and China Petroleum (NYSE.) Engineering Corp.

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