Friday January 11, 04:03 AM
BROKER CALL - China telecom restructuring talk 'another false alarm' - UBS
HONG KONG (XFN-ASIA) - UBS (Virt-X: UBSN.VX - news) said reports about a possible early start to the restructuring of China's
telecom industry look like 'another false alarm'.
The investment bank said it does not see restructuring happening before the Beijing Olympics in August, and perhaps not this year at all.
'Our Beijing visit confirms it as another speculation,' UBS said in a research note.
It said restructuring is extremely unlikely to happen before the Olympic Games and 'we are seeing an increasing chance that it could be delayed to 2009.'
It added: 'Basically, we have not seen any clear regulatory driving force from the central government after the political reshuffle. We believe neither restructuring nor 3G licensing decisions could finalize before the political landscape crystallizes a bit more in China,'
UBS said China Mobile (0941.HK - news) remains its top pick in Chinese telecoms.
'We continue to prefer mobile over the fixed-line players, and China Mobile remains the top pick, followed by China Unicom (0762.HK - news) ,' UBS added.
Reports that restructuring is imminent moved share prices yesterday and this morning.
At 11:23 am today, China Unicom was up 1.2 hkd or 6.85 pct at 18.72, off a high of 19.26; China Mobile was up 0.2 hkd or 0.015 pct at 135.30.
Among fixed-line providers; China Telecom was down 0.23 hkd or 3.14 pct at 6.78, off a high of 7.14, and China Netcom was down 0.15 hkd or 0.60 pct at 24.90.
According to one report that cited sources inside the State Council, or cabinet, a restructuring plan could be released by the end of this month, to be followed by a management reshuffle at the top four telecom companies.
( 1 usd = 7.80 hkd)
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