BBMG performs strongly on Hong Kong debut

Cement producer BBMG posted a 56% gain on its first day of trading in Hong Kong on the back of expectations of continued spending on housing and infrastructure, Bloomberg reported. The company, which raised US$767 million through its initial public offering – the second-largest in Hong Kong so far this year – is China’s largest manufacturer of construction material. Although analysts say the first day gains have left the stock overpriced, BBMG is seen as being a key beneficiary of the rise in urban fixed-asset investment, which jumped by 34% in the first half of 2009, the most in five years. The public works largely responsible for this growth are likely to continue, with Beijing unveiling plans yesterday for an US$8.8 billion financial district development. China Investment Corp, the country’s sovereign wealth fund, China Life Insurance and US hedge fund OZ Management between them bought US$175 million in BBMG shares.