* Could raise as much as $5.3 bln
* Would be world's second-largest IPO this year
* Funds for overseas expansion and technology upgrade
(Adds analyst comments and details)
By Carolyn Qu and Shen Yan
SHANGHAI, Sept 10 (Reuters) - Metallurgical Corp of China (MCC) priced its Shanghai IPO at the top end of an indicated range, a move that could raise up to $5.3 billion in the world's second-largest public offering this year, three sources briefed on the pricing results on Thursday.
MCC will sell 3.5 billion A shares, or 21 percent of its expanded capital, at 5.42 yuan ($0.79) each, ahead of a dual listing in Shanghai and Hong Kong, said the sources.
It has been offering the A shares at between 5 yuan and 5.42 yuan in Shanghai and up to 2.87 billion H-shares in Hong Kong at a range of HK$6.16 to HK$6.81.
If both the A- and H-shares are priced at the top of the range, MCC could raise as much as $5.3 billion, second only to China State Construction Engineering Corp's $7.3 billion IPO in July.
The company is expected to announce the A-share pricing on Thursday evening and H-share pricing next Thursday, according to a sales document, with trading to start on Sept. 21 in Shanghai and on Sept. 24 in Hong Kong.
Book runners for the deal include Morgan Stanley, Citigroup and CICC.
MCC is one of a slew of firms that the China Securities Regulatory Commission has pushed into the market since the regulator resumed IPOs in June after a 10-month suspension.
The benchmark Shanghai Composite Index ended 0.7 percent lower at 2,924.883 on Thursday.
Investor concern over a surge in equity supply and fears of lending curbs hit the benchmark Shanghai Composite Index last month, but the market has stabilised in the past week partly due to government reassurance it will not tighten monetary policies.
"The negative impact of MCC's IPO has already been digested by investors," said Gao Lingzhi, analyst at Great Wall Securities.
"We expect to see fewer major IPOs in the coming months, as regulators may slow approvals to stabilize the market."
MCC has said it needs funds to develop overseas projects including a copper mine project in Afghanistan. It also needs funds for technical upgrades, equipment purchases, property development and supplemental working capital.
MCC's Shanghai IPO was priced at around 42 times its 2008 earnings. That is slightly more expensive than the average price/earnings ratio of 39 for China's 15 listed construction and engineering firms, according to Reuters Research.
The average PE ratio of Shanghai's A shares is about 25 times 2008 earnings, which is already almost double Hong Kong's 16 times, in spite of the A-share market's recent slump.
CITIC Securities was the IPO's sole lead underwriter, MCC has said. ($1=6.83 yuan) (Additional reporting by Samuel Shen; Editing by Jacqueline Wong and Simon Jessop)