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SHANGHAI, China (AP) -- China Shenhua Energy Co., the country's biggest coal miner, looks set for a strong trading debut Tuesday in Shanghai after raising a record 66.6 billion Chinese yuan (US$8.9 billion; euro6.3 billion), in the country's largest domestic initial public offering. Shenhua Energy's Hong Kong traded shares gained 1.8 percent to 45.80 Hong Kong dollars (US$5.87; euro4.15) on Monday. The Shanghai market appeared primed to deliver at least the double-digit gains typical of recent IPO debuts after the benchmark Composite Index rose 2.5 percent Monday to a record close of 5,692.76. Earlier Monday, the Shanghai Composite Index hit an all-time intraday high of 5,724.36 as investors made up for lost time after a weeklong national holiday, snapping up financials and other blue chips. Shenhua's 1.8 billion yuan-denominated shares attracted a record number of IPO subscriptions and were priced at 36.99 yuan (US$4.92; euro3.48) each, the top of their indicative range. The company has said it plans to use proceeds from the offering to finance expansion of its mining and other business operations as well as possible overseas acquisitions. China's yuan-denominated "A shares" are generally off-limits to foreign investors. But local investors have shown a seemingly insatiable appetite for new share issues, helping push the benchmark index up 113 percent since the beginning of the year. Mainland Chinese IPOs have raised a record US$40.5 billion (euro28.7 billion) so far this year, surpassing the US$21.1 billion for all of 2006, according to data provider Thomson Financial. Many of those share offerings have been by elite state companies like Shenhua, whose Beijing-based parent company Shenhua Group owns coal mines, railways, ports and power plants. Most of its mining operations are in northern China's Inner Mongolia. Shenhua's IPO constitutes 9 percent of the listed unit's capital. Its offering topped China Construction Bank's of late last month, which raised 58.05 billion yuan (US$7.7 billion; euro5.6 billion), the previous record for a mainland IPO. The world's biggest IPO ever was Industrial & Commercial Bank of China's US$21.9 billion offering in October 2006 that sold shares simultaneously in Hong Kong and Shanghai. Other pending share listings include IPOs by oil and gas giant PetroChina Co. and telecoms operator China Mobile. Shenhua Group sold 240 million tons of coal in 2006 and projects sales for 2007 at 260-270 million tons. The company reported that its net profit rose 20 percent in the first half of the year over the same period last year to 10.3 billion yuan (US$1.4 billion; euro990 million).
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