‘The world’s biggest-ever wipeout of shareholder wealth’ – China’s latest business and technology news

Business & Technology

A summary of the top news in Chinese business and technology for October 30, 2017. Part of the daily SupChina newsletter, a convenient package of China’s business, political, and cultural news delivered to your inbox for free. Subscribe here.

Bloomberg reports that “ten years after PetroChina peaked on its first day of trading in Shanghai, the state-owned energy producer has lost about $800 billion of market value — a sum large enough to buy every listed company in Italy, or circle the Earth 31 times with $100 bills.”

  • The article says: “In current dollar terms, it’s the world’s biggest-ever wipeout of shareholder wealth. And it may only get worse.”
  • Bloomberg compiled an average of analyst estimates that predicts PetroChina’s shares on the Shanghai stock exchange “will sink 16 percent to an all-time low in the next 12 months.”
  • PetroChina stock “has been pummeled by some of China’s biggest economic policy shifts of the past decade,” including government strategies to move away from a commodity-intensive development model, and clampdowns on speculative investments. Unpredictability in world oil markets has not helped.
  • The “wipeout of shareholder wealth” has not been evenly distributed: The Chinese government is the biggest shareholder of the company’s stock, and the rest of its shares are listed on stock exchanges in New York, Hong Kong, and Shanghai, so different types of investors have had different levels of pain.

—Jeremy Goldkorn