| Miner's initial public offering oversubscribed |
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ZHAOJIN Mining Industry Co received applications for 100 times the HK$2.19 billion (US$281.7 million) of shares it''s selling in the biggest initial public offering for a Chinese gold mining company, people with knowledge of the matter said, according to Bloomberg News.
Zhaojin, the biggest gold miner in Shandong Province, stopped taking orders from institutional investors yesterday, said one person involved in the sale and two fund managers notified by UBS AG, the underwriter. They declined to be identified before an announcement by the Zhaoyuan, Shandong-based miner.
South Africa''s Standard Bank Group and Kuwait''s Global Investment House are among companies investing in Zhaojin, which is benefiting from a surge in gold prices as investors bet the United States dollar will weaken and instability in the Middle East adds to the metal''s allure.
The Hong Kong shares of Zijin Mining Group Co and Lingbao Gold Co have more than doubled this year. "A lot of people are still very positive about the outlook for the gold price," said Tat Auyeung, who helps manage about US$400 million in Asian stocks at Apex Capital Management in Hong Kong. "If you think the dollar is going to be weaker, then you have to own gold."
Shares valued at HK$341 million were reserved for four strategic investors, including South Africa''s Standard Bank Group and Star Valley Group.
Shanghai Fosun is Zhaojin''s second-biggest shareholder, with a 20 percent direct holding, according to a UBS report distributed to fund managers on November 7.
Strong demand signals Zhaojin will price its shares at the top end of the HK$9.80 to HK$12.68 range.
"It''s too expensive," said Ke Shifeng, who helps manage US$2.3 billion of Greater China assets at Scotland-based Martin Currie Investment Management. "It has smaller reserves than Zijin and higher costs. Zijin also has better management."
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| Date:2006-11-30 10:38:51 From:Shanghai Daily |
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