Amazing. I mentioned last Wednesday in Chinese Oil is Flying, and that PetroChina (NYSE:PTR) will be listing on the Shanghai (domestic) market. That exchange is basically the plaything of mainland Chinese investors and no one else really gets access - hence the valuations there are very out of whack with the rest of the world.
Well, today the news is out that PetroChina won regulatory approval
(shocker!) and more amazing is what that is 'worth' - this is a $300
Billion market cap company and it is up 10% premarket. So simply by
listing on Shanghai in addition to its current listings in Hong
Kong/New York and flooding the market with new shares (4 BILLION) i.e.
dilution to earnings per share (so they can raise money to explore
more) that is worth +$30 Billion. I used to say "only in America" but I
guess now we can say "only in China".
This is not like the dot com days - this is in some ways worse. I can't recall anything similar pushing a stock up of this size. Back then, stocks used to go up 20% on news of a stock split, another non-starter (you get twice the shares for half the price) or 30% if you decided you were going to compete with Ebay in auction or Yahoo/Excite/Lycos in search - even if you had no expertise. As long as you mentioned you were gunning for them, your stock rocketed.
Essentially, the world markets have valued PetroChina at Z and a simple notification of listing in Shanghai means the company is now worth Z x 1.10. Classic.