China Telecom approved to list in Shanghai

China’s securities regulator on Thursday approved China Telecom to list on the Shanghai Stock Exchange, two months after the state-owned telecommunications company was delisted from the New York Stock Exchange (NYSE).

Why it matters: China Telecom’s domestic listing comes as US-China rivalry spreads to the equity sector. The US has set stricter rules for Chinese firms listing on US stock markets, and China has in recent months increased scrutiny on companies seeking overseas listings.

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Details: The China Securities Regulatory Commission said in a Thursday announcement (in Chinese) that it had approved China Telecom’s plan to issue shares in Shanghai, without providing a listing date.

  • The company said in its prospectus (in Chinese) that it plans to raise RMB 54.4 billion (around $8.4 billion) in the Shanghai listing.
  • The funds will be used to expand its next-generation 5G networks, and for research and development, the prospectus said.
  • China Telecom plans to issue up to 12.1 billion Chinese A-shares in Shanghai, or up to 13% of its total equities after the listing.
  • China Telecom went public in Hong Kong in 2002, the same year of its New York listing. The company’s Hong Kong-listed shares have surged more than 49% since the beginning of this year.

Context: In May, the NYSE delisted three state-owned Chinese telecom operators, China Telecom, China Mobile, and China Unicom.

  • The three operators received delisting decisions from the NYSE in January. The decision came after former US President Donald Trump signed an executive order in November that bars Americans from investing in Chinese firms that the US said aided China’s military, intelligence, and security services.

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