TWO of China's most powerful energy companies moved closer to their Shanghai listing this week, stimulating interest in shares and helping stabilize prices in the mainland market now heavily oriented to bank stocks.

The Hong Kong-listed China Shenhua Energy Co could potentially raise 66.6 billion yuan (US$8.9 billion) after pricing its yuan-denominated A shares at a range between 34.99 yuan and 36.99 yuan each on Sunday. The company will sell 1.8 billion A shares in Shanghai.

Shenhua's mass initial public offering is set to dwarf the US$7.7 billion raised by the China Construction Bank which started trading on the Shanghai Stock Exchange on Tuesday and could become the world's largest IPO this year.

Shenhua, China's largest coal miner, started taking subscriptions on Monday. Spurred by news of Shenhua's return, Pingdingshan Tianan Coal Mining Co rose 2.79 percent on Monday although the smaller player ran into profit taking the next session.

Top Asian oil and gas producer PetroChina Co, also listed in Hong Kong, came nearer to its eye-catching Shanghai IPO after the China Securities Regulatory Commission approved its listing plan after the market closed on Monday.

As a reject for such a company like PetroChina is unlikely, investors on Monday bought heavily into oil service providers in the mainland market amid renewed interests. China Petroleum & Chemical Corp (Sinopec), Asia's top refiner and China's second-largest oil producer, jumped 3.71 percent on Monday.

Only Sinopec, which is actually more of an oil refiner, can really be classified as an oil stock on the mainland market - most other related firms are usually in petrochemicals or oil engineering. China's No.3 oil producer CNOOC Ltd is also listed in Hong Kong, a market mainland investors have limited access to.

Beijing-based PetroChina hasn't announced a price range for the Shanghai IPO, which is expected to be launched next month or in November. Based on PetroChina's close price in Hong Kong on Monday, the Shanghai share sale could raise about US$7.6 billion. But companies would practically price their A shares at a discount to its H shares.

"People here will prefer PetroChina above the others," said Orient Securities analyst Wang Jing. "Mainland investors should have the opportunity to share in what is the most profitable company in Asia."

The return of the two stock powerhouses is also important as they can help dilute weighting in the mainland market where the index is mainly affected by stocks in the finance sector, typically in major bank stocks.

"This would make it increasingly difficult for those who want to manipulate the index through heavy trading in those big caps," a director at Guotai Jun'an Securities Research said. "In this regard, the return of more heavy-weights is positive for the launch of the stock-index future."

As of yesterday, half of the top 10 stocks by percentage weights in the Shanghai Composite Index are bank stocks and two of them are insurers.

Newcomer China Construction Bank, which has not been included in the index because of exchange rules, will definitely join the top 10 later. The benchmark index is capitalization weighted.

Han Gaofeng, a researcher at the China Center for Financial Research under the China Europe International Business School, said institutional investors with deep pocket will definitely favor big caps like PetroChina.

"They are their chips," Han said. "I think they can still influence the index a lot as the liquidity is good. This is a time for big institutional players not retail investors."