China's Sinohydro Corp. is a Chinese state-owned hydropower engineering and construction company and the world's largest hydroelectric company.
On 18 October Sinohydro Corp. shares surged as much as 38 percent in their Shanghai IPO debut, triggering a temporary suspension because of "abnormal" trading.
Huatai Securities strategist Chen Huiqin said, "The high turnover rate means the buying was largely arranged to support the share performance. Probably Sinohydro would tumble by the 10 percent daily limit tomorrow. This could send a message to the stock regulators that the market is capable of digesting large IPOs, and then more big IPOs would come," The Shanghai Daily reported.
During the first day of its IPO Sinohydro Corp. stock rose 17.11 percent, with 93.96 percent of shares being traded, in sharp contrast to the Shanghai Composite Index that fell 2.33 percent during the first day's trading period of Sinohydro Corp. stock.
Sinohydro Corp. built China's Three Gorges Dam, the world's largest hydroelectric project to date, with an installed capacity of 20,300 megawatts.
The Sinohydro Corp. IPO raised $2.1 billion in the share sale, the largest IPO this year in China. China has budgeted $313 billion for hydropower and water infrastructure projects by 2016.
By. Joao Peixe, Deputy Editor OilPrice.com
Joao is a writer for Oilprice.com More