Bank of Communications stock soars 80 per cent on Shanghai debut

May 15, 2007, 7:31 GMT

Shanghai - Shares of China's Bank of Communications Ltd nearly doubled in value Tuesday in their market debut in Shanghai.

The stock in China's fifth-largest financial institution opened at 7.9 yuan (1.03 dollars) and closed at 14.2 yuan. The 80-per-cent rise exceeded analysts' expectations for a 50-per-cent surge.

The Bank of Communications, which was already listed in Hong Kong, earned 25.2 billion yuan in its initial public offering on the mainland.

The bank's showing came despite increasing concern among investors and China's central bank chief that China is seeing a stock bubble that could soon burst.

The Shanghai-based bank benefited from a stock boom in China that has seen the country's prolific savers invest their money more than more in stocks as they seek returns that are higher than the inflation rate. Alone in April, investors opened 4.8 million new stock-trading accounts, the China Daily newspaper reported.

The Shanghai Composite Index, which tracks shares on the larger mainland bourse, has risen more than 50 per cent so far this year after gaining 130 per cent last year.

On Tuesday, however, the index fell 2.65 per cent to 3,939.29 along with China's other major indices like the Shenzhen Composite Index, down 1.61 per cent at 1,109.63, and the CSI 300 Index, which tracks stocks on both exchanges, down 2.4 per cent at 3,644.80.