HONG KONG -- A much anticipated $3.7 billion initial public offering of shares (IPO) in giant telephone service provider China Telecom was delayed Thursday (October 31, 2002), the victim of lack of interest among major institutional investors and those wary of China's regulatory risk.
The IPO effort will have a direct bearing upon telecommunications equipment makers, who vie to sell equipment into China's growing market. Even though most of the world is in a slump for telecommunications equipment, China has been an oasis for investment and remains a strongly growing market for fixed-line and wireless services.
The IPO was Asia's largest this year, and the third largest worldwide. The company said it would re-launch another effort next week, but did not specify a listing date. Originally, the shares were due to list on November 6.
China Telecom officials had been criss-crossing the US this week to raise interest in the listings, which targeted the Hong Kong and New York stock exchanges.
Analysts said the delay was surprising, especially considering that the lower range of the listing price was close to the net asset value of the company.
However, with such a sour environment for IPOs, some analysts speculated that the company might have to sweeten the deal for investors, such as raising its dividend.