China Mobile, the world's largest cellphone company in terms of
user numbers, may float shares on the mainland this year,
vice-chairman of the securities regulator said yesterday.
The move will make China Mobile probably the first
overseas-incorporated company to list on the Shanghai bourse.
"Hong Kong-traded companies can sell shares directly in China"
and no longer need to use Chinese depositary receipts (CDRs), said
Fan Fuchun, vice-chairman of the China Securities Regulatory
Commission (CSRC), on the sidelines of the annual session of the
National Committee of the CPPCC.
He did not give a specific timetable for the listing.
China Mobile, which was listed in Hong Kong in 1997, submitted
an application for mainland listing of CDRs about five years ago,
said Rainie Lei, a spokeswoman for China Mobile.
Though there have been media reports of China Mobile submitting
an application to the Shanghai Stock Exchange this year, Gao
Songge, a senior press officer at China Mobile Group, said he knew
nothing about it.
Analysts said China Mobile's decision to head to the mainland is
spurred by the imminent licensing of 3G (third-generation) mobile
technology, which will require plenty of fresh capital to build a
suitable infrastructure.
Inspired by a 130 percent jump in the Shanghai index last year
and the successful dual listing model of blue-chip companies such
as the Industrial and Commercial Bank of China, more "red chips"
seem eager to head to the mainland market.
Those interested in moving to the mainland include CNOOC Ltd,
China Insurance International Holdings and COFCO International Co
Ltd.
Red chips are companies incorporated and listed in Hong Kong,
but whose main sphere of business is on the mainland. Most red
chips are large conglomerates that listed in Hong Kong in the
1990s.
By the end of November, 85 red chips with a combined market
value of HK$2 trillion were listed in Hong Kong, accounting for 21
percent of the bourse's market capitalization.
The regulator believes the presence of red chips will boost the
quality of the mainland bourse and offer more opportunities for
mainland investors.
Although some analysts believe issuing CDR is a more feasible
choice for China Mobile, the regulator is inclined to adopt a
simple and direct plan.
"CDRs involve a lot of aspects and are more complicated, so we
prefer letting them list on the A-share market directly," Shang
Fulin, chairman of the CSRC, said while attending the annual
session of the National People's Congress a few days ago.
(China Daily March 16, 2007)