| ICBC now 4th-biggest global enterprise |
SHANGHAI, Aug. 9 -- INDUSTRIAL and Commercial Bank of China Ltd, until yesterday the worst-performing stock on the nation's 300-strong benchmark index, rose by a record 9.8 percent in Shanghai to become the world's fourth-biggest company.
The stock closed at 6.37 yuan (84 US cents), increasing the Beijing-based bank's market value to 1.97 trillion yuan and leading a rally among bank shares in China. Investors considered banks cheap relative to earnings after they trailed the benchmark index, with financial firms making up eight of the 10 worst performers on the CSI300 Index as of Tuesday.
The valuations reflect a Chinese share rally that created six of the world's 30 biggest companies, with ICBC eclipsing Citigroup Inc and AT&T Inc and approaching Microsoft Corp, which has a market value of US$277 billion. Chinese individuals are putting more of their US$2.2 trillion of savings into the stock market, closed to most foreigners, drawing a warning from central bank Governor Zhou Xiaochuan that a bubble is forming.
The market is "so dependent on retail sentiment inside China because so few international funds have access to the shares, which means it tends to overshoot," said Shane Oliver, who helps manage US$83 billion at AMP Capital Investors in Sydney. "The ride's going to be very volatile because the authorities are very keen to prevent it getting too far out of hand."
One billion ICBC shares changed hands in Shanghai, more than two 1/2 times the daily average for the past six months.
Bank of China Ltd, the nation's second biggest bank, advanced 7.5 percent while China Merchants Bank Ltd gained 3.4 percent.
|
|
