China Unicom's domestic IPO draws nigh
( 2002-09-10 09:37 ) (1 )

Mobile carrier China Unicom is getting close to its initial public offering (IPO) on the domestic stock market.

Although the final date has not been set, the IPO is expected by late October, sources close to the deal told China Daily.

A senior manager at China Unicom said the approval procedure for the company's domestic listing has reached the final stage.

But the exact date and IPO price have not yet been decided.

Industry insiders said the China Securities Regulatory Commission (CSRC) is waiting for a more friendly environment to cushion potential market turbulence brought on by Unicom's huge IPO. The company said earlier that its A-share listing might be the biggest one ever on the domestic stock market. The company previously planned to raise more than the 11.8 billion yuan (US$1.4 billion) mark hit by Sinopec in its IPO.

But Unicom recently said it would reconsider that figure to help ease investors' anxiety about potential pressures that could arise from such a huge IPO.

As the first telecom carrier to be listed on the domestic A-share bourse, which is closed to overseas investors, China Unicom has generated keen interest among domestic investors and industry insiders.

China's stock markets experienced drops as investors worried that Unicom's big IPO may sap already thin market liquidity.

Domestic investors and industry insiders showed divided opinion towards Unicom's pending listing.

Feng Lei, analyst with Beijing Securities, said as the first telecom carrier to be listed, Unicom's concept is welcome.

This view is shared by many individual investors. Ye Xin, a 25-year-old stock investor in Beijing, said he would buy stock in Unicom because it will be the first opportunity for domestic investors to buy shares in a rapidly growing telecom carrier.

China's dual mobile operators, China Mobile and China Unicom, are both listed on the overseas market. And the major fixed-line carrier China Telecom is also preparing to go public abroad.

Unicom's A-share IPO will give domestic investors their first opportunity to invest in a telecom carrier.

"As one of the most rapidly growing companies, Unicom is very attractive to investors," said Beijing Securities' Feng.

But there are also strong negative opinions. Dai Chunrong, an analyst with China Securities, said short-term investors may hesitate to buy Unicom shares as the company's big flotation will make earning money in the short term a difficult task.