本文发表在 rolia.net 枫下论坛China Telecom, with late tariff hike, to price IPO
Reuters, 10.30.02, 3:05 AM ET
By Tony Munroe
HONG KONG, Oct 30 (Reuters) - China Telecom Corp Ltd <0728.HK> (nyse: CHA - news - people) is expected to price its massive initial public offering toward the low end of its indicated range despite a last-minute hike in charges to connect calls from Hong Kong and elsewhere, fund managers said.
The fixed-line phone giant, which hopes to raise up to US$3.68 billion in the world's third-biggest offering this year, is set to price its shares late on Wednesday in New York or early on Thursday in Hong Kong.
In a move that has raised eyebrows in Hong Kong and underscores the regulatory risk of investing in China, the carrier two days ago told Hong Kong phone companies that it would boost connection fees for calls from the territory by eight-fold to 17 US cents per minute -- effective on Friday.
"I think it's outrageous," David Webb, a Hong Kong corporate governance and shareholder rights advocate, told Reuters.
"It's a blatant attempt to pump the IPO," said Webb, who runs the Internet page Webb-site.com.
Hong Kong is a huge source of calling traffic into mainland China, and calling volumes from the territory are three times the volume of traffic in the other direction, meaning China Telecom could enjoy a profit windfall from the increased connection charge, industry sources said.
"I think they're trying to support the issue any way they can, and I think it makes sense for them to do that," said Henry Lee, managing director at fund managers Hendale Advisors Ltd.
Company watchers warned that the increase in call rates could be short-lived, given that China is liberalising its telecoms sector and competition will likely force carriers to bring rates back down again.
"One of the reasons they're raising rates is they'll gradually have to start reducing rates," said Lee.
Webb said that under the new tariff structure, calls from Hong Kong into neighbouring Guangdong province will cost four times the rate of a typical call from Hong Kong to New York.
PROSPECTUS AS WORK IN PROGRESS
In the second supplement to its prospectus in two days, China Telecom said on Wednesday that China's telecoms regulator had "unified" the minimum tariff rate for inbound international calls -- including from Hong Kong -- at 17 US cents.
The rate from Hong Kong is currently about 2 US cents. It could not immediately be determined what China charges for calls from other places, and whether the new minimum represents a big overall increase.
China Telecom said it had "not made any quantitative assessment of how this change will impact the results of the company," but said it won't have any material impact on results in its current year, which ends in two months.
Already during its IPO, the company has had to play down earnings and revenue guidance it gave during a media briefing last week, and issued a prospectus supplement on Tuesday urging investors not to regard those numbers as projections.
REGULATORY RISK
Beijing's heavy regulatory hand can cut both ways for foreign investors.
Shares in China's duopoly cellular giants China Mobile (Hong Kong) <0941.HK> and China Unicom Ltd <0762.HK> -- fell 20 and 28 percent, respectively, during a week in late 2000 on worries over a change in pricing policy by Beijing.
The conflict between Beijing's wish to lure foreign capital and its hopes of developing a competitive telecoms sector have frequently been at odds. Uncertain timing over China's eventual issuance of additional mobile licences, for example, has at times spooked investors in the two carriers.
In its updated prospectus on Wednesday, China Telecom noted that its parent is "actively seeking" a mobile licence.
TOUGH TIMING
China Telecom launched its huge offering into a market soured on stocks in general and telecoms in particular, although the company won a reprieve of sorts when the recent rebound in markets began just as it set out on its investor roadshow.
The company, which is counting on relatively low phone penetration in China and still vigorous economic growth to lure investors, also sweetened its planned dividend payout.
Still, market insiders expect the IPO to be priced towards the cheaper end of its indicated range of HK$1.48-HK$1.71.
"I expect the issue price will be set at the lower end of the range -- 1.48 to 1.50," said a fund manager at a North American brokerage in Hong Kong.
The company issuing shares includes networks in three of China's richest provinces plus the city of Shanghai.
Some in the market have expressed worry that the company's plans to buy additional provincial networks -- perhaps within 2003 -- could lead to further capital-raising efforts. Shares in the carrier are set to begin trading on November 6 in New York and the following day in Hong Kong.
(US$=HK$7.8)
Copyright 2002, Reuters News Service更多精彩文章及讨论，请光临枫下论坛 rolia.net
Reuters, 10.30.02, 3:05 AM ET
By Tony Munroe
HONG KONG, Oct 30 (Reuters) - China Telecom Corp Ltd <0728.HK> (nyse: CHA - news - people) is expected to price its massive initial public offering toward the low end of its indicated range despite a last-minute hike in charges to connect calls from Hong Kong and elsewhere, fund managers said.
The fixed-line phone giant, which hopes to raise up to US$3.68 billion in the world's third-biggest offering this year, is set to price its shares late on Wednesday in New York or early on Thursday in Hong Kong.
In a move that has raised eyebrows in Hong Kong and underscores the regulatory risk of investing in China, the carrier two days ago told Hong Kong phone companies that it would boost connection fees for calls from the territory by eight-fold to 17 US cents per minute -- effective on Friday.
"I think it's outrageous," David Webb, a Hong Kong corporate governance and shareholder rights advocate, told Reuters.
"It's a blatant attempt to pump the IPO," said Webb, who runs the Internet page Webb-site.com.
Hong Kong is a huge source of calling traffic into mainland China, and calling volumes from the territory are three times the volume of traffic in the other direction, meaning China Telecom could enjoy a profit windfall from the increased connection charge, industry sources said.
"I think they're trying to support the issue any way they can, and I think it makes sense for them to do that," said Henry Lee, managing director at fund managers Hendale Advisors Ltd.
Company watchers warned that the increase in call rates could be short-lived, given that China is liberalising its telecoms sector and competition will likely force carriers to bring rates back down again.
"One of the reasons they're raising rates is they'll gradually have to start reducing rates," said Lee.
Webb said that under the new tariff structure, calls from Hong Kong into neighbouring Guangdong province will cost four times the rate of a typical call from Hong Kong to New York.
PROSPECTUS AS WORK IN PROGRESS
In the second supplement to its prospectus in two days, China Telecom said on Wednesday that China's telecoms regulator had "unified" the minimum tariff rate for inbound international calls -- including from Hong Kong -- at 17 US cents.
The rate from Hong Kong is currently about 2 US cents. It could not immediately be determined what China charges for calls from other places, and whether the new minimum represents a big overall increase.
China Telecom said it had "not made any quantitative assessment of how this change will impact the results of the company," but said it won't have any material impact on results in its current year, which ends in two months.
Already during its IPO, the company has had to play down earnings and revenue guidance it gave during a media briefing last week, and issued a prospectus supplement on Tuesday urging investors not to regard those numbers as projections.
REGULATORY RISK
Beijing's heavy regulatory hand can cut both ways for foreign investors.
Shares in China's duopoly cellular giants China Mobile (Hong Kong) <0941.HK> and China Unicom Ltd <0762.HK> -- fell 20 and 28 percent, respectively, during a week in late 2000 on worries over a change in pricing policy by Beijing.
The conflict between Beijing's wish to lure foreign capital and its hopes of developing a competitive telecoms sector have frequently been at odds. Uncertain timing over China's eventual issuance of additional mobile licences, for example, has at times spooked investors in the two carriers.
In its updated prospectus on Wednesday, China Telecom noted that its parent is "actively seeking" a mobile licence.
TOUGH TIMING
China Telecom launched its huge offering into a market soured on stocks in general and telecoms in particular, although the company won a reprieve of sorts when the recent rebound in markets began just as it set out on its investor roadshow.
The company, which is counting on relatively low phone penetration in China and still vigorous economic growth to lure investors, also sweetened its planned dividend payout.
Still, market insiders expect the IPO to be priced towards the cheaper end of its indicated range of HK$1.48-HK$1.71.
"I expect the issue price will be set at the lower end of the range -- 1.48 to 1.50," said a fund manager at a North American brokerage in Hong Kong.
The company issuing shares includes networks in three of China's richest provinces plus the city of Shanghai.
Some in the market have expressed worry that the company's plans to buy additional provincial networks -- perhaps within 2003 -- could lead to further capital-raising efforts. Shares in the carrier are set to begin trading on November 6 in New York and the following day in Hong Kong.
(US$=HK$7.8)
Copyright 2002, Reuters News Service更多精彩文章及讨论，请光临枫下论坛 rolia.net