China Eastern Airlines has completed the initial public offering of 32% of its shares on the New York and Hong Kong stock exchanges, raising about $250 million from the sale.
The flotation appears to have been reasonably well received, with the offer 22 times oversubscribed in Hong Kong. A total of 1.4 billion shares were sold, 1.26 billion in blocks of 100 in New York, and the remaining 10% in Hong Kong to retail and institutional investors.
On its first day of trading in New York, the share price was up 15% at its high, although it weakened on news from the Chinese Government that it intends to slash domestic fares for foreign travellers. "It's not as well oversubscribed as other issues-but all things considered, it has been well received," says Salomon Brothers analyst Peter Negline.
Concern about the airline's comparatively high level of debt and China's regulatory environment appear to have been discounted by market sentiment. China Eastern is the first mainland carrier to be listed overseas and, following its success, is likely to be followed by China Southern.
Taiwan's China Airlines has announced a 7.3% rise in operating income for 1996, exceeding NT$50 billion ($1.82 billion) for the first time. The flag carrier enjoyed an 11.8% increase in overall passenger and cargo traffic. Passenger load factors for the same period increased by 3%, to reach 75.1% - the highest of any of the Orient Airlines Association's 17 member carriers.
Source: Flight International
