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November 2, 2017 | PetroChina: Foreshadowing the Saudi Aramco IPO?

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel ( Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog:

In typical initial public offering (IPO) marketing frenzy, PetroChina was sold to investors at the peak of the 2007 commodity cycle for a record $1 trillion.  Since then the shares have lost 80% of their market value and counting.  Here is the chart.

The many good reasons for the price decline include:   hype and speculative fever in the stock bubble of 2007 (similar to now), as well as the 62%+ plunge in oil prices to present, the rise of renewable energy technology, and Chinese President Xi Jinping’s ambitious plans to promote electric vehicles and move the country away from commodity-intensive development (and air pollution).  See The biggest stock collapse in the world has no end in sight.   Here is a direct video link.

The PetroChina story should also serve as a cautionary tale for would-be-investors as the Saudis work to talk up the value of their planned Aramco Oil IPO.  Hint:  the Saudis too hope to raise cash for renewable energy investment.

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November 2nd, 2017

Posted In: Juggling Dynamite

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