Iran says China group ready to replace Total on gas deal

Updated 17 May 2018
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Iran says China group ready to replace Total on gas deal

  • Total started the $4.8 billion South Pars 11 project in July 2017, two years after Western powers signed a nuclear deal with Tehran.
  • Chinese state-owned oil company CNPC will replace Total on a major gas field project in Iran if the French energy giant pulls out over renewed US sanctions against Tehran.

TEHRAN: Chinese state-owned oil company CNPC will replace Total on a major gas field project in Iran if the French energy giant pulls out over renewed US sanctions against Tehran, Iran’s oil minister has said.
“Total has said that if it doesn’t get an exemption from the United States to continue its work, it will begin to pull out of the deal,” Bijan Namdar Zanganeh was quoted as saying by his ministry’s Shana news service.
“If that happens, the Chinese firm CNPC will replace Total.”
Total started the $4.8 billion South Pars 11 project in July 2017, two years after Western powers signed a nuclear deal with Tehran prompting the return of many businesses to Iran.
But earlier this month, US President Donald Trump announced his withdrawal from the deal, and warned companies that they face sanctions if they do business with Iran.
The French group said Wednesday it has $10 billion of capital employed in its US assets, and US banks are involved in 90 percent of its financing operations, making Total highly vulnerable if targeted by any US actions.
By contrast, Total said it had spent less than €40 million on the Iranian project, which it runs with its partner Petrochina and which is dedicated to the supply of domestic gas inside Iran.
Zanganeh said on Wednesday that were CNPC, which was part of the Total deal, unable to carry out the work in South Pars due to US sanctions it would fall to Iran’s Petropars.
Iran possesses the second-largest gas reserves on the planet, after Russia, and the fourth largest oil supplies.


Debut of China’s Nasdaq-style board adds $44bn in market cap

Updated 22 July 2019
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Debut of China’s Nasdaq-style board adds $44bn in market cap

  • Activity draws attention away from main board

BEIJING: Trading on China’s new Nasdaq-style board for homegrown tech firms hit fever pitch on Monday, with shares up as much as 520 percent in a wild debut that more than doubled the exchange’s combined market capitalization and beat veteran investors’ expectations.

Sixteen of the first batch of 25 companies — ranging from chip-makers to health care firms — increased their already frothy initial public offering (IPO) prices by 136 percent on the STAR Market, operated by the Shanghai Stock Exchange.

The raucous first day of trade tripped the exchange’s circuit breakers that are designed to calm frenzied activity. The weakest performer leapt 84.22 percent. In total, the day saw the creation of around 305 billion yuan ($44.3 billion) in new market capitalization on top of an initial market cap of around 225 billion yuan, according to Reuters’ calculations.

“The price gains are crazier than we expected,” said Stephen Huang, vice president of Shanghai See Truth Investment Management. “These are good companies, but valuations are too high. Buying them now makes no sense.”

Modelled after Nasdaq, and complete with a US-style IPO system, STAR may be China’s boldest attempt at capital market reforms yet. It is also seen driven by Beijing’s ambition to become technologically self-reliant as a prolonged trade war with Washington catches Chinese tech firms in the crossfire.

Trading in Anji Microelectronics Technology (Shanghai) Co. Ltd., a semiconductor firm, was briefly halted twice as the company’s shares hit two circuit breakers — first after rising 30 percent, then after climbing 60 percent from the market open.

HIGHLIGHTS

• 16 of 25 STAR Market firms more than double from IPO price.

• Weakest performer gains 84 percent, average gain of 140 percent.

• STAR may be China’s boldest attempt at capital market reforms yet.

The mechanisms did little to keep Anji shares in check as they soared as much as 520 percent from their IPO price in the morning session. Anji shares ended the day up 400.2 percent from their IPO price, the day’s biggest gain, giving the company a valuation of nearly 242 times 2018 earnings.

Suzhou Harmontronics Automation Technology Co. Ltd., in contrast, triggered its circuit breaker in the opposite direction, falling 30 percent from the market open in early trade before rebounding. But by the market close, the company’s shares were still 94.61 percent higher than their IPO price.

Wild share price swings, partly the result of loose trading rules, had been widely expected. IPOs had been oversubscribed by an average of about 1,700 times among retail investors.

The STAR Market sets no limits on share prices during the first five days of a company’s trading. That compares with a cap of 44 percent on debut on other boards in China.

In subsequent trading sessions, stocks on the new tech board will be allowed to rise or fall a maximum 20 percent in a day, double the 10 percent daily limit on other boards.

Regulators last week cautioned individual investors against “blindly” buying STAR Market stocks, but said big fluctuations were normal.

Looser trading rules were aimed at “giving market players adequate freedom in the game, accelerating the formation of equilibrium prices, and boosting price-setting efficiency,” the Shanghai Stock Exchange (SSE) said in a statement on Friday.

The SSE added that it was normal to see big swings in newly listed tech shares, as such companies typically have uncertain prospects, and are difficult to evaluate.