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Chinese coal producer raises US$1.7bn

China's second-largest coal producer by revenue sold 3.25 billion shares at US$0.52 (HK$4.05) to raise US$1.7 billion, the Wall Street Journal reported. The retail portion of the offering which closed Monday was 180 times oversubscribed while the institutional tranche was oversubscribed 50 times. This strong interest from retail investors resulted in a clawback mechanism kicking in that saw the portion of the deal sold to individuals jump from 5% to 20%. "These markets have so much liquidity and momentum that investors were willing to pay a higher premium for China Coal Energy than its listed peers," Francis Lun, general manager of Fulbright Securities told the newspaper. "But after a few weeks, investors are likely to switch back into [China] Shenhua Energy and Yanzhou [Coal Mining] because of lower valuations."

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