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Wed, Jul 22, 2009 - Page 10 News List

China State Construction Engineering IPO cleared

AP , BEIJING

A worker carries an iron beam as he walks inside the National Aquatics Center, known as the “Watercube,” on Oct. 17, 2007.

PHOTO: AP

The Chinese company that built the “Water Cube” swimming center for the Beijing Olympics said yesterday it hopes to raise up to US$7.3 billion in the world’s biggest initial public offering (IPO) since March last year.

The decision to let China State Construction Engineering Corp (中國建築工程) proceed with such a huge IPO indicates regulators believe China’s markets have regained their strength after a plunge last year that prompted a ban on new offerings.

China’s main market index is up more than 75 percent this year and was the world’s best performer for the first half of this year.

“There will be no problem selling all those shares in the current market mood,” said Mao Nan, an analyst for Oriental Securities in Shanghai.

State Construction will offer 12 billion shares at 3.96 yuan to 4.18 yuan (US$0.57 to US$0.61) per share, the company said in a statement through the Shanghai Stock Exchange. That would bring in 50.1 billion yuan if all shares sell at the highest price.

State Construction said earlier it hoped to raise 42.6 billion yuan. The increase might reflect increased confidence in the price Chinese investors are willing to pay.

State Construction is China’s biggest builder of housing and is known for the “Water Cube” and other showcase projects such as the futuristic state TV headquarters and China’s tallest skyscraper, the 492m-tall Shanghai World Financial Center.

Its IPO would be the world’s biggest since Visa’s US$19.7 billion listing last March, according to financial data firm Dealogic. It would be China’s biggest since PetroChina Ltd in October 2007 and the country’s fourth-largest to date.

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