China Telecom, here are the stock exchange plans in Shanghai
China Telecom plans to go public in Shanghai and raise more than $ 8 billion: it would be the largest IPO of 2021. Full details
Chinese telecom company China Telecom could raise more than $ 8 billion by going public on the Shanghai stock exchange. This would be, in the case, the largest initial public offering of 2021 so far, which would come after the removal of the company's title ( delisting ) from the New York Stock Exchange on Wall Street.
THE VALUE OF THE OFFER
China Telecom said it had set a price of 4.53 yuan per share for its offer, for a total of 47.1 billion yuan. The sum could grow up to 54 billion yuan in the event that, as Bloomberg writes, the over-allotment option is exercised: this is an instrument that favors the stabilization of the price of a stock after the initial public offering.
THE POLICY BEHIND THE “DELISTING” FROM WALL STREET
Last January, China Telecom – along with two other Chinese state-owned telecommunications companies: China Mobile and China Unicom – was "delisted" from the New York Stock Exchange following the restrictive investment measures between the United States and China adopted by the former President Donald Trump . This policy prevents Americans from investing in those Chinese companies accused of having contacts with the military in Beijing.
Despite the opposition of the business and financial world, the current American president Joe Biden has not revoked the measures of his predecessor, also given the continuation of the economic and political tensions between Washington and Beijing.
COMPARISON WITH THE KUAISHOU IPO
China Telecom's initial public offering in Shanghai would be the largest in 2021, surpassing the 5.4 billion raised in February by Kuaishou Technology – the Chinese tech company that developed the TikTok-like app of the same name – with its listing on the Hong Kong stock exchange.
WHAT CHINA TELECOM DOES (AND WILL DO)
China Telecom is the largest fixed line operator in China. The money raised with the initial public offering will be used, among other things, to upgrade the infrastructure for 5G networks and the cloud.
BECAUSE CHINESE COMPANIES ARE LISTED IN THE HOME
Since the 2000s, many Chinese companies active in the technology and telecommunications sectors have been listed on the US stock market, which is more advanced than the national one, with the aim of raising funds.
Today, however, the context is very different and the geopolitical competition between China and America has led Chinese companies, under pressure from the Beijing authorities, to go public on domestic stock exchanges such as those in Shanghai and Shenzhen. It is a trend that has seen a strong acceleration in recent months, given the will of the Chinese government to strengthen its control over the large national technology companies.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/china-telecom-ecco-i-piani-di-borsa-a-shanghai/ on Mon, 09 Aug 2021 13:14:41 +0000.