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Thursday, 22 June, 2000, 10:37 GMT 11:37 UK
Ringing debut for China Unicom
China Unicom office
Once 100% state-owned, China Unicom is striking out on the stock market
by Damian Grammaticas in Hong Kong

China Unicom, the second biggest telecoms firm in China, has made a strong debut on the Hong Kong Stock Exchange as investors continue their love affair with mobile phone shares.

Unicom shares were so popular that they accounted for almost 20% of volume on the stock exchange.

And while the market's benchmark index, the Hang Seng, fell, Unicom shares bucked the trend, to end the day with a gain of just under 8%.

China goes mobile

Yang Xianzuc, chairman and CEO of China Unicom
China Unicom chairman Yang Xianzuc now has almost $5bn to spend
China Unicom, until now a state-owned corporation, has proved popular with investors keen to get a slice of the potentially lucrative telecommunications market in China.

China Unicom is seen as particularly attractive because of it's mobile telephone network and internet businesses.

China's telecommunications market is rapidly expanding and will open to the outside world once the country joins the World Trade Organisation.

Many analysts predict that mobile phones will dominate the Chinese market, because mobile networks can be expanded far quicker than fixed-line ones.

Expansion plans

China Unicom raised almost $5bn with its flotation on the stock market.

It plans to use the proceeds to expand the capacity and coverage of its mobile telephone network, expand its fibre optic transmission network, its data network and its internet business.

Hong Kong stock brokers reading newspapers
The China Unicom flotation dominated headlines on the Hong Kong Stock Exchange
The strong interest in China Unicom shares comes after investors in Hong Kong were caught up in a stampede to buy shares in the internet firm earlier this year.

Unicom's initial offering, the largest ever in Asia, outside Japan, has proved popular as well, although it did not provoke quite the same levels of interest.

However some analysts are warning that China's telephone network will take years to open up.

Unicom shares closed their first day of trading at HK$16.90, below an early peak of HK$17.30 but well above the offer price of HK$15.58 a share for institutional investors.

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See also:

24 Feb 00 | Business
Internet fever sweeps Hong Kong
29 Feb 00 | Asia-Pacific
Asian telecoms giant takes shape
29 Dec 99 | Business
China's trillion dollar economy
19 May 00 | Business
Analysis: China's WTO hopes
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