皇冠体育app

Shares of 皇冠体育app Unicom plunged significantly yesterday on a rumor that its parent firm - Shanghai-listed 皇冠体育app United Telecommunications Co - is planning to list and sell more shares.

Separately, speculation of delays in the long-awaited restructure of the mainland's telecom sector also helped drag down 皇冠体育app Unicom share prices by 4.7 percent. They closed at HK$17.40 yesterday.

A man uses his cell phone while walking past a 皇冠体育app Unicom service center. Shares of 皇冠体育app Unicom Ltd fell sharply yesterday on speculation of a massive new share offer by its parent company. Bloomberg News

The company is the smaller of two mobile-phone-service operators on the mainland, behind 皇冠体育app Mobile.

皇冠体育app United's shares, which are traded in Shanghai, fared considerably worse, falling beyond the daily trade limit of 10 percent.

The speculation is that 皇冠体育app United plans to issue new shares in a bid to raise between 60 and 70 billion yuan, but 皇冠体育app Unicom spokeswoman Sophia Tso said that wasn't true.

"This is purely a rumor. The company does not have a new share-issue plan," she told Reuters.

As for the delay in the sector's restructuring, word is that no annoucement on the plan will be released until after the National People's Congress meeting next month.

The news dealt a further blow to 皇冠体育app United, which is expected to benefit from the industry reshuffle.

"Institutions are selling heavily. It appears to be related to the industry-restructuring issue," said Zhang Yanbing, analyst of Zheshang Securities.

The news also pushed down the prices of other mainland telecom stocks yesterday. Hong Kong-listed 皇冠体育app Mobile dipped 0.5 percent to close at HK$115.50.

A DBS Vickers report attributed the 皇冠体育app Unicom plunge to its overvalued share prices, calling the drop of its share prices a normal correction.

The report gave a "hold" rating to 皇冠体育app Unicom with a target price of HK$17.99.

Tung Tai Securities Associate Director Kenny Tang said mainland telecom stocks would inevitably be affected by restructuring delays, but it's a short-term drop.

"We believe the impact is limited since the reform will be implemented sooner or later this year," Tang said. "Shares of 皇冠体育app Unicom will regain the ground when the reform schedule is finalized."

Tang said the telecom shares will stay volatile until the new policy is set.

Speculation of the mainland telecom restructure speculation has long lingered in the market.

A likely proposal will be for 皇冠体育app Telecom to acquire the CDMA assets of 皇冠体育app Unicom, while 皇冠体育app Unicom merges with 皇冠体育app Netcom. As part of the proposal, 皇冠体育app Mobile may acquire 皇冠体育app Tietong.

Analysts said the central government hopes to use the measures to balance the competitiveness among all players.

(HK Edition 02/26/2008 page2)