China miner soars on market debut

Interest in the flotation has been intense

Shares in Chinese gold miner Fujian Zijin have soared by more than 70% on their Hong Kong stock market debut.

The company raised $1.2bn Hong Kong dollars (£88m; $147m) in a flotation that was oversubscribed 744 times.

The sale, the most popular public offering in Hong Kong since 1997, was fuelled by rampant demand for Chinese shares among retail investors.

Global gold prices, too, are firm, and mining companies around the world have seen their shares in high demand.

Growing ambitions

The Chinese mining sector - still relatively poorly penetrated by international investors - is seen as a fertile field for development.

South Africa's Gold Fields, the world's fourth-largest producer, has said it will invest US$500,000 in a venture with Zijin to explore and develop gold properties.

Zijin, the first gold mining company to list in Hong Kong, plans to use the proceeds to buy more mining resources in the centre and west of the country.

Its aim is to boost annual output by 50% to 15 tonnes of gold by by 2008.

The sale puts 27.5% of the company in the hands of investors.

Great demand

Demand for Zijin's public subscription outstripped last week's offering from Chinese vehicle maker Great Wall Automobile Holding, which was 683 times oversubscribed.

To find a sale attracting greater levels of public interest, it is necessary to go back to 1997, when Beijing Enterprises Holdings attracted applications for 1,276 times the shares on offer.

Last week, insurance firm China Life raised $3bn through a listing in New York; its shares jumped by one-quarter on the first day of trading.

Interest in Chinese shares is intense, both in Hong Kong and further afield.

The Chinese economy is growing by 8% a year, and many good companies are growing much faster than that.

And for retail investors, opportunities to invest directly in the Chinese market are still relatively rare.