In its first day of trading, PetroChina Co. became the world’s most valuable company, hitting $1 trillion in market capitalization after shares nearly tripled to 43.96 yuan from an IPO of 16.7 yuan. It’s now worth more than the entire Russian stock market. Some analysts interpreted the valuation as “an indication of China coming of age,” Bloomberg reports. For others, it’s a sign of an unsustainable market bubble.
PetroChina is now worth more than Exxon Mobil and General Electric combined, even though Petro has just a quarter of Exxon’s revenue, and uncertain growth potential. One Hong Kong analyst said Petro’s production would be static for three to four years, while government-controlled gas prices would limit earnings. Warren Buffett’s Berkshire Hathaway sold its Petro stake, saying prices were rising too fast.