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Investor appetite for Chinese stocks has reached fever pitch with shares in the business-to-business internet company Alibaba.com nearly tripling on its first day of trading.
The stock now sits on a valuation of more than 300 times its projected earnings for this year.
Alibaba.com is the largest technology listing since Google lit up the markets in 2004 and its debut performance on the Hong Kong stock exchange suggests the e-commerce platform has captured the imagination of investors desperate to gain exposure to one of the world's biggest growth markets.
Alibaba.com's debut came only a day after PetroChina, the largest energy company in the country became the first company to achieve a valuation of US$1 trillion ($1.3 trillion) after its first day of trading in Shanghai on Monday.
The stunning performance in Chinese shares has led to concerns that a Chinese bubble has emerged with valuations far in excess of the current earnings power of the companies, although that does not appear to have deterred investors who have helped drive the Shanghai market up more than 100 per cent this year.
Alibaba.com raised US$2 billion via its flotation on the Hang Seng index, but demand for the shares vastly outstripped supply with individual investors ordering more than 250 times the amount of stock on offer. Shares were listed at HK$13.50 ($2.23), but surged to HK$39.50 by the end of trading.
- Independent
