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China Rail firm loses US$14 billion in value day after debut
[BEIJING] CRRC Corp, the behemoth China created by combining two railroad equipment makers, slumped on its second day of trading in Hong Kong, falling below its listing price and wiping out about US$14 billion in market value.
The shares ended down 12.5 per cent at HK$13.72 in Hong Kong and down 9.3 per cent at 29.38 yuan in Shanghai. On Monday, the stock - formed by merging CSR Corp. and China CNR Corp. - had opened for trading in the two markets at HK$15 and 29.45 yuan, respectively.
The merger of the railroad makers created an entity that was China's answer to General Electric Co, as the combination tried to expand its presence overseas. CRRC now has a market value of US$116 billion, after rising as high as about US$130 billion Monday. Fairfield, Connecticut-based GE has a market capitalization of US$274 billion.
China is using its state-owned rail firms to win lucrative contracts and project political influence abroad. CRRC dwarfs competitors like Germany's Siemens AG and France's Alstom SA as it targets emerging markets in Africa, Latin America and Southeast Asia - often with sales pitches from Premier Li Keqiang - while bidding for high-profile contracts in the developed world.