China Southern Railway dual debut has promise

Shares in China South Locomotive & Rolling Stock, also known as China Southern Railway (CSR), are set to begin trading in Shanghai and Hong Kong after the company raised US$1.5 billion in a dual listing, the Financial Times reported. The newspaper cited a Reuters survey of analysts projecting CSR’s shares to rise by up to 60% in Shanghai and 30% in Hong Kong, despite a weak performance from both stock markets thus far this year. The railway sector has continued to draw interest from investors, however, partly due to the ongoing government plan to spend US$180 billion on rail construction from 2006 to 2010, of which only 27% has been spent so far. The outlay on railroads is four times that spent on railways in the previous five-year period.