(Bloomberg, Nov 30, 2006) Baoshan Iron & Steel Co., China's biggest steelmaker, said conditions for share sales were improving, sparking speculation it may speed plans to sell stock overseas. The stock rose as much as 6.5 percent.

``Overseas investors are enthusiastic about buying Chinese companies' stocks,'' said Chen Ying, chief financial officer of Shanghai-based Baoshan Steel, which has a market value of 119 billion yuan ($15 billion). The company doesn't yet have specific plans to trade shares overseas, she said.

Share sales by Chinese companies reached $59.6 billion this year, or 12 percent of the global total, according to Bloomberg data. At the same time, steel prices may gain as much as 20 per cent in the first half, UBS AG said this week in a report.

``It's a good opportunity for overseas offering,'' said Lu Yizhen, who helps manage more than 6 billion yuan worth of assets, including Baoshan Steel stock, at Citic-Prudential Fund Management Co. in Shanghai. ``Steel stocks in Hong Kong have surged on the improved outlook for steel prices.''

Baoshan Steel's shares, up 65 percent this year, rose as much as 0.42 yuan to 6.88 yuan today in Shanghai. The stock traded at 6.82 yuan at 1:09 p.m. local time. Baoshan Steel is the fifth-largest company on the Shanghai stock exchange by market value.

`Welcome Posco'

Baosteel Steel Corp., Baoshan Steel's parent company, may ask South Korea's Posco and Japan's Nippon Steel Corp. to buy shares in the company, Nikkei English News reported today, citing an interview with Baosteel Chairwoman Xie Qihua. ``The timing is good'' for an overseas listing of Baosteel, Nikkei cited Xie as saying.

``We welcome Posco and Nippon Steel to become our strategic investor once we sell shares overseas. We haven't changed our views on that,'' said Yu Hong, a Baoshan Steel's spokeswoman by phone in Shanghai.

Posco and Nippon Steel, the world's second-largest steelmaker, said they haven't received any request from Baosteel to buy shares. Posco, the world's third-biggest steelmaker, will consider any official request from Baosteel, Lee Sang Chun, a spokesman at the Pohang-based company said by phone.

A possible alliance between Asia's top three steelmakers' was first muted in 2000, when Posco said it was considering swapping shares with Baoshan steel to create a three-way tie-up between the mills to boost their marketing and raw material buying power. Baoshan Steel wanted a top foreign steelmaker to buy a stake in the company once it lists its shares overseas, Baoshan Steel spokeswoman Yu Hong said November 2000.

Chinese Banks

Posco shares rose 2,000 won, or 0.7 percent, to 289,500 won at 10:54 a.m. Seoul time. Nippon Steel shares rose 9 yen, or 1.8 percent, to 515 yen.

Baoshan Steel, which sold shares for the first time in 2000 in Shanghai, will seek a public offering in overseas markets, including Hong Kong by 2010, the company's President Ai Baojun said in October.

``The successful overseas listings of Chinese banks set a very good example for us,'' said Baoshan Steel's Chen in an interview. Initial public offerings by banks since June 2005 have totaled $44 billion, spurred by a four-year investment boom has powered annual economic expansion of 10 percent in China, double the global average.

Source:Bloomberg