These corporate bonds are reserved for domestic investors, and 5 to 10 percent will be sold to individual investors, according to China Mobile (Hong Kong).

The company is the Hong Kong-listed subsidiary of China's dominant mobile telecom carrier, China Mobile Communications Corp, which has the world's most number of subscribers.

The bonds will be issued by Guangdong Mobile Communications Co. Ltd, a wholly-owned subsidiary of China Mobile (Hong Kong), and guaranteed by the parent company, China Mobile Communications Corp.

All the accumulated money will be used to buy network assets in eight provinces on the Chinese mainland.

Five billion yuan (US$600 million) in bonds will have a 15-year debt and carry an annual interest of 4.3 to 4.6 per cent. The remaining 3 billion yuan (US$240 million) in bonds will have a five-year debt with an annual interest of 3.5 to 3.7 per cent.

"The bonds will be quite attractive to investors after the domestic stock market experienced a year-long stagnation," said Wang Guoping, securities analyst at China Galaxy Securities Co.

Instead of losing money in the stock market, many investors would prefer to buy more secured corporate bonds, Wang said.

Compared with the State treasury bonds, which are commonly called "golden-edge bonds" because of their high credit level, China Mobile's bonds offer a much higher interest and hence make them more attractive, the analyst said.

Registration for the bonds started yesterday and will last until Friday. The bonds will soon be tradable after the company finally decides on interest rates. Individual investors can then buy bonds of China Mobile (Hong Kong) at certain securities companies.

Wang Xiaochu, chairman and chief executive officer of China Mobile (Hong Kong), said the company received approval from the securities regulator to soon list the bonds on the domestic stock market.

He said given the company's dominant position in the mainland market, which holds about 70 per cent of the market share, and good performance, he is confident of a warm welcome to the bonds.

China's telecom carriers have been quite active in the capital market recently.

China Mobile's only rival, China Unicom, launched 5 billion A shares on the Shanghai Stock Exchange and raised 11.5 billion yuan (US$1.4 billion) on October 9.

As the first domestic listed telecom carrier, China Unicom's A shares attracted strong interest from domestic investors.

But the performance of Unicom's A shares is described by many industry insiders as "flat" or even "disappointing" as the market is holding a skeptical attitude towards the development of Unicom's second mobile network, CDMA or code division multiple access.

Unlike China Mobile, which operates only one mobile network called the GSM (global system for its mobile communications) network, China Unicom is operating both GSM and CDMA networks.

China Unicom is scheduled to announce today that its CDMA users reached 4 million to enable the company's total mobile subscribers to surpass 60 million, according to industry sources.

China Mobile's Wang Xiaochu said he believed his company could provide better services as "we are focusing on one network."

Aside from these two mobile carriers, China Telecom, the fixed-line telecom giant in China's south, will start a roadshow today for its overseas stock listing. The roadshow will last three weeks with executives of China Telecom going to major markets in Europe, the United States and Japan to promote its stock.

China Telecom's pending listing will raise US$3.2-3.5 billion and to the biggest in Asia and the third biggest in the world for the year, according to investment bank sources who prefer to remain unnamed.

The active performance of domestic telecom carriers in the capital market is not isolated, commented Yang Peifang, a telecom expert at the Chinese Academy of Telecommunications Research. After the telecom market restructure settled down earlier this year, the companies are trying to accumulate as much capital as they can to make preparations for fierce competition.

(China Daily October 15, 2002)