China's Zijin Mining jumps 40 pct in Shanghai debut

Thu Apr 24, 2008 9:33pm EDT

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SHANGHAI, April 25 (Reuters) - Shares in China's Zijin Mining Group Co Ltd (601899.SS: Quote, Profile, Research, Stock Buzz) jumped 40 percent in their Shanghai debut on Friday, above analysts' forecast, buoyed by the company's expansion plans and a warming stock market after support by government policy moves.

Local-currency A shares in Zijin, which is also listed in Hong Kong (2899.HK: Quote, Profile, Research, Stock Buzz), opened at 9.98 yuan versus a Shanghai initial public offer price of 7.13 yuan. A Reuters survey of four industry analysts had forecast the stock to trade around 9.5 yuan on its debut day.

The opening price gave Zijin a 40-percent premium against its Hong Kong-listed H shares, last traded at HK$7.92 on Thursday. The premium was slightly higher than an average premium of 39 percent .HSCAHPI for all dual-listed A shares against H shares of the same companies.

China's second-largest gold producer raised 10 billion yuan ($1.4 billion) in the mainland's first major IPO in two months, after a $3.1 billion issue by China Railway Construction (601186.SS: Quote, Profile, Research, Stock Buzz)(1186.HK: Quote, Profile, Research, Stock Buzz) in the second half of February.

Zijin has said it would invest 4.92 billion yuan of the IPO proceeds in expansion projects, including overseas acquisitions in Britain and Tajikistan, while further proceeds would go towards repaying bank loans or serve as working capital.

China's benchmark Shanghai Composite Index .SSEC opened down 0.30 percent at 3,572.547 points on Friday after a 9.3 percent jump on Thursday, following the government's announcement of a cut in the stock trading duty by two-thirds, sending a strong supportive signal to the market.

The index had plunged as much as 51 percent from last October's record peak to a 13-month low of 2,990.788 points on Tuesday, dragged down by high inflation, the possibility of an economic slowdown this year, and heavy supplies of fresh equity. ($1=6.99 Yuan) (Reporting by Lu Jianxin; Editing by Edmund Klamann)