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Alibaba.com Makes Stellar Trading Debut, Analysts Warn of '.com' Bubble


Alibaba.com, China's business-to-business Web site, made a stunning debut on the Hong Kong stock market, but its shares have slipped since the first day of trade. Analysts say the company likely will see its stocks continue to fall as hype about the Internet company fades. Kate Woodsome has more on this and other business stories from VOA's Asia News Center in Hong Kong.

On its November 6 debut, shares of Alibaba.com nearly tripled in price to $5.09, from the issue price of $1.74.

Investors eager to tap China's growing technology market drove the demand for Alibaba-dot-com, which raised $1.5 billion through its sale of 858-.9 million shares. That is second only to Google's $1.66 billion debut in 2004.

But the day after their first public appearance, shares of Alibaba.com fell about 17 percent.

Howard Gorges, the vice chairman of South China Brokerage in Hong Kong, says Alibaba.com may be overvalued and likely will see further declines on profit-taking.

"The company appears to be a good company, probably will grow its profits fast. But can it grow its profits fast enough, long enough to justify the current share price?" he asks. "Well that's anybody's guess, but we saw the bubble in America in 2000, so one's just got to bear that in mind."

The Walt Disney Company says Hong Kong Disneyland's poor performance is dragging down its earnings. The company has reached a new agreement with the theme park's major creditors to remove the debt conditions on its loans for one year. The U.S. entertainment giant also has offered to temporarily give up the royalties and management fees paid by the park.

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ong Kong Disneyland has reported losses since it opened in 2005. The Walt Disney Company says it will continue to invest in the park, and the Hong Kong government says it is considering financing more attractions to draw new visitors.

The U.S. Federal Reserve Board has approved a plan by China Merchants Bank Company to open a branch in New York. The Fed says it approved the application because Chinese regulators have taken steps to cut down on money laundering. China Merchants is China's sixth-largest bank.

Bank of China, the country's largest foreign-exchange lender, is the only Chinese bank with a branch in the U.S. Its New York branch opened in 1981.

China's state-run Xinhua news agency says the country has issued more than 1.3 billion bankcards. China UnionPay, a bankcard network operator, says in the first nine months of this year, bankcards were used in more than 18 percent of national retail sales.

And the South Korean firm Rotem says it has won a $310 million contract to supply electric subway cars for the Indian capital, New Delhi. Rotem, a unit of Hyundai Motor, says it will deliver 192 rail cars to Delhi Metro Rail Corporation by June 2010. The metro rail is expected to transport up to 40,000 people during peak hours.

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