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Blacklisted China Telecom moves to raise cash in Shanghai

(ATF) Hong Kong-listed China Telecom, the state-owned carrier blacklisted by Washington, said on March 9 that it plans to sell shares in Shanghai to broaden its financing channels.

Shares in the telecommunications provider rose as much as 9.8% in Hong Kong on March 10 to its highest in a year, before settling down up 2% in late morning trading.

China Telecom proposes to sell up to 12.09 billion shares publicly on the Shanghai Stock Exchange, or 13% of the enlarged capital base, according to an exchange filing.

The company will raise roughly $4.1 billion, based on its Hong Kong closing price on Tuesday.

China Telecom, along with China Mobile and China Unicom, are appealing against a decision by the New York Stock Exchange to delist their American Depositary Receipts (ADRs), after former president Donald Trump banned US investment in companies with alleged military backing.

Index publishers MSCI, FTSE Russell and S&P Dow Jones Indices removed the three Chinese companies from their global benchmarks after they were put on the US blacklist.

Analysts remain optimistic about all three Chinese companies despite the US blacklist.

“The impact of the US executive order is likely to create buying opportunities for ‘non-US-person’ investors,” Neale Anderson, head of Asia telecoms research at HSBC, said.

“We also note that they are close to joining those very few telcos – South Korea, Telstra come to mind – that have passed the peak of 5G investment,” he added. 

This should enable them to shift their focus to new service development – particularly in the enterprise realm – as well as shareholder returns, Anderson noted.

With reporting by Reuters


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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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