China Netcom (CN), the last of China's four major telecoms to list overseas, saw a good first day of trading on the New York Stock Exchange, and it will attempt to copy that success today as its shares open in Hong Kong. In New York, shares skyrocketed to $26, from their initial public offering price of $21.82.
This 19% jump was almost double the expected 10% jump most analysts predicted. Netcom sold about 16.2% of its enlarged share capital, and investors are hoping for a 5-10% increase in share prices in Hong Kong when trading begins there.
Hong Kong's Hutchison Telecommunications and Singapore's StarHub both did their own IPOs in the last few weeks and both these telcos saw their share prices drop in the first day of trading. China Netcom was discounted about 17%, leveling off at around a 7.7 multiple of adjusted expected 2005 earnings.
Citigroup, Goldman Sachs, and China International Capital Corporation were the underwriters.