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China Mobile overtakes HSBC as top listed firm in HK

(South China Morning Post)
Updated: 2007-06-27 16:11

China Mobile, the country's biggest mobile-telephone operator, yesterday surpassed HSBC Holdings to become Hong Kong's largest company by market capitalisation as investors bet the red chip will launch a mainland listing as soon as August.

The top spot, reached only days before the 10th anniversary of Hong Kong's handover, underscores the ascendancy of mainland companies in the city as well as investor demand for shares likely to benefit from a surge in the nation's stock market.

China Mobile rose 0.65 per cent to close at a new high of HK$84.80, bringing its market capitalisation to HK$1.7 trillion. HSBC fell 0.07 per cent to HK$144.10, lowering its market capitalisation to HK$1.69 trillion.

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Market watchers said China Mobile shares might reach HK$100 on speculation it would be the first red chip to return to the mainland stock market. The central government is encouraging large companies on overseas exchanges, commonly known as red chips andH shares, to list at home to help reduce market volatility and give investors a wider choice of shares to buy.

Eight of the 10 largest companies on the Hang Seng Index are now mainland companies, according to Bloomberg data. The only non-mainland firms are HSBC and Hutchison Whampoa, ranked second and 10th, respectively.

Wong Chi-man, a telecommunications analyst at Everbright Securities, said market sentiment was heating up over the imminent return of red chips to the mainland.

"I will not be surprised if China Mobile rises to more than HK$100, becoming the first mainland company to surpass that benchmark," Mr Wong said.

It was not the first time China Mobile, which listed in October 1997, has overtaken HSBC to become the city's largest company. In February and March 2000, it reached a market value of more HK$1 trillion.