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Chinese companies take advantage of stock boom

SHANGHAI, China (AP) -- Taking advantage of a record-setting stock market surge, two major Chinese state companies and a bank announced plans Tuesday to raise millions of dollars with new share issues.

Prices on China's two stock markets have soared by more than 50 percent since mid-May. The rise has been driven largely by calls for higher prices by the government, which hopes to use the markets to finance economic reform.The announcements indicate China is emerging from a drought in new share listings. More than 50 companies are awaiting permission to list shares, but had been delayed by a 2-year-old slump in share prices.

Wuhan Iron and Steel Co. said in a prospectus published in newspapers that it would raise $160 million, while Huabei Expressway Co. said it would raise $150 million.

State-owned Shanghai Pudong Development Bank said it was preparing for an initial public offering but didn't say how much it hoped to raise. If the issue is successful, it would be only the second time a Chinese bank has been allowed to sell shares to the public. All Chinese banks are state-owned.

Wuhan Iron, one of China's biggest steel makers, said it would invest its stock proceeds in new technology. Huabei Expressway, which manages highways and ports, said it would use its proceeds to buy into another highway-management firm.

Shares offered by both companies are meant only for Chinese investors. Foreign investors, barred from trading most Chinese stocks, are allowed to buy only special foreign-currency shares issued by a handful of companies.

Pudong Development Bank had planned a stock offering for more than a year, but that was postponed repeatedly because of low prices.