Thought Patterns
by Emanuel
November 6, 2007 at 00:58
filed under rant
On the same day, Petrochina has become the first company to be valued $1 trillion, and Hong Kong’s Hang Seng index suffered its largest drop since 9/11.
PetroChina Co., which raised $8.9 billion in the world’s biggest share sale this year, passed Exxon Mobil Corp. as the world’s largest company by market value after surging on its trading debut in Shanghai.
[...]
Hong Kong’s Hang Seng Index slumped 5 percent, its biggest drop since Sept. 12, 2001. The benchmark jumped as much as 55 percent since the start of trading on Aug. 20, when China’s government announced plans to let its citizens invest directly in the city’s shares.
So Petrochina, which has about half the profits of Exxon (roughly $20 billion vs. $40 billion), became twice as big as the second most valued company in the world (Exxon is valued at about $488 billion on the NYSE). At the same time, as quoted above from Bloomberg.com, the market reacted negatively to the announcement of Chinese Premier Wen Jiabao that plans to open citizens of the mainland to invest in Hong Kong.
Is this the start of the end for the massive bubble we’ve been hearing so much about? These are some pretty mind boggling facts yet they are not as in opposition as they might look at first hand. Not to state the obvious, but this is a highly complex issue and I will continue to strive to better grasp its implications.
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