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Aluminum Corp. of China triples in first day of trading in Shanghai

Aluminum Corp. of China triples in first day of trading in Shanghai

Aluminum Corp. of China tripled in its first day of trading in Shanghai on Monday, reflecting strong investor interest in the world's second-largest alumina producer.
Analysts said the company, also known as Chalco, may fall in the coming sessions because the stock is already highly priced. Chalco's yuan-denominated A shares closed at 18.51 yuan (US$2.40), off an intraday high of 20.10 yuan (US$2.61), but sharply above the offer price of 6.60 yuan (86 U.S. cents).
"Chalco has risen too sharply ...flush liquidity has driven it up so much," said Zheng Dong, an analyst at Guosen Securities.
Zheng said he expects Chalco's A shares to fall at least 8 percent in the next session as the frenzy around the new listing eases.
Chalco also trades on Hong Kong's H share market, where the stock edged up 0.4 percent to HK$9.29 (US$1.19).
Mainland China's stock markets will be closed from Tuesday to May 7 for the Labor Day holiday, and will reopen May 8.
Chalco is China's largest alumina and aluminum producer, and the world's No. 2 alumina producer after Alcoa Inc. It issued 1.24 billion yuan-denominated A shares at 6.60 yuan each, in exchange for the stakes it didn't own in two Shanghai-listed units.
The new shares account for 9.6 percent of its enlarged share capital. The units, Shandong Aluminium Industry Co. and Lanzhou Aluminium Co., were delisted upon Chalco's domestic debut Monday.
Xiao Yaqing, the company's chairman and chief executive, said over the weekend he expects the price of Chalco's A shares to be higher than that of its Hong Kong-listed H shares, because mainland-listed shares are generally trading higher than their Hong Kong counterparts. The mainland's financial markets are flush with funds but short on investment options.
A shares are issued by companies incorporated in mainland China and are closed to most foreign investors. H shares are Hong-Kong listed shares issued by China-based companies.
Chalco's leadership in the alumina and aluminum sector will also help support its share price, analysts said.
Chinalco produced 9.62 million metric tons of alumina in 2006, accounting for 73 percent of the country's total alumina output of 13.24 million.
Chalco plans to produce 10 million tons of alumina this year, up 24 percent from 2006, and 2.5 million tons of aluminum, up 30 percent, Xiao said over the weekend.
The company estimated its output this year will be about 56 percent of China's alumina production and 22 percent of its aluminum production.


Updated : 2021-02-26 12:12 GMT+08:00