SHANGHAI, April 21 (Reuters) - CNOOC Ltd shares
surged as much as 44% in their Shanghai debut on Thursday,
defying broad market weakness, as investors sought safety in the
Chinese oil giant amid high energy prices and quickening
After opening 20% higher, CNOOC shares immediately shot up
44% on the Shanghai Stock Exchange, hitting a price ceiling for
the day and triggering a 30-minute trading halt. The stock ended
the session up 27.7%.
It marked a bright spot in a bleak Shanghai market
that slumped more than 2% amid COVID-19 lockdowns and
"CNOOC is being chased by investors who are seeking shelter
in big caps with relatively low valuation and high dividends,"
said Linus Yip, chief strategist at First Shanghai Group. "The
stock also whets market appetite at a time when oil prices are
climbing and inflation accelerating."
China's largest offshore oil producer raised 28.08 billion
yuan ($4.41 billion) in the country's 11th-biggest public stock
offering. It said it would use the proceeds to fund one gas and
seven oilfield projects in China and overseas, and to replenish
The Shanghai listing "is a key milestone in the company's
history," CNOOC Chairman Wang Dongjin said in a statement.
CNOOC will fully exploit financing channels both home and
abroad, to promote quality growth, and create value for
shareholders, he added.
Chen Shuxian, an analyst at Cinda Securities, said in a note
on Thursday that "CNOOC represents historic investment
opportunities, thanks to high oil prices, low valuation, and
consistently high dividend yields," adding the company's market
cap has potential to double over the next few years.
CNOOC's Hong Kong-listed shares rose as much as 4.3% in
early trading, but later swung to a loss of roughly 3%.
CNOOC starts trading in Shanghai against a backdrop of a
downbeat stock market that has witnessed an increasing number of
stocks falling below their initial public offering (IPO) prices.
A third of the roughly 100 companies which have listed this
year in Shanghai and Shenzhen have fallen below their offer
prices on debut, data from East Money Information show. Some,
including chipmaker Vanchip Tianjin Technology Co Ltd
and electronics firm Rigol Technologies Co Ltd
, tumbled more than 30%.
Such debut performance - in sharp contrast with the
first-day pop that once featured in China's stock markets -
reflects the result of IPO reforms, as well bearish investor
China's stock markets are the second worst performers
globally this year after sanctions-hit Russia, as the economy
grapples with COVID-19 flare-ups, the Ukraine crisis, and U.S.
Yang Hongxun, an analyst at investment consultancy Shandong
Shenguang, said many stocks that were deserted on debut are
small caps with lofty valuations, whereas CNOOC was priced
In its Shanghai offering, CNOOC shares were priced at 10.8
yuan, 23.88 times earnings, or 1.05 times net assets.
The Shanghai sale came after CNOOC was delisted in October
by the New York Stock Exchange after the U.S. government added
the firm to a trade blacklist citing suspected connections to
China's military. CNOOC said it had operated in accordance with
State-backed peers PetroChina Co Ltd and China
Petroleum & Chemical Corp (Sinopec) are already
listed in Shanghai.
(Reporting by Jason Xue, Samuel Shen and Andrew Galbraith;
editing by Christopher Cushing and Jason Neely)