UPDATE1-Portugal's CTT shares jump in market debut
LISBON Dec 5 (Reuters) - Portugal's postal service CTT opened at 5.9 euros in its Lisbon stock exchange debut on Thursday, 7 percent higher than its privatisation price in the bailed-out country's first IPO in almost five years.
The oversubscribed sale of a 70 percent stake in CTT was priced at the top of the range at 5.52 euros per share, valuing the whole company at 830 million euros ($1.13 billion). The Portuguese state will reap 580 million euros with the operation.
At 1050 GMT, CTT stock was up 5 percent at 5.8 euros.
Portugal had promised to privatise CTT in it's 2011 EU/IMF bailout deal.
Analysts gave two reasons for the stock's strong early performance, despite declining postage volumes and a dependency on the Portuguese market.
"The attractive part is the dividend and the possibility of setting up a postal bank... I think the stock has potential," said Gualter Pacheco, a broker at Go Bulling in Porto.
Financial services currently make up 8 percent, or 58 million euros, of CTT's sales and last month the Bank of Portugal authorised it to set up a postal bank if future shareholders opt to do so.
The last flotation on Lisbon's stock market was renewable energy company EDPR in 2008.
After the CTT placement, Portugal has raised around 6.9 billion euros in privatization revenues, beating its end-2013 bailout target of 5.5 billion euros.