Analysts also expressed skepticism on the validity of the market rumors.

Shares of China Mobile surged to an historic high of HK$70 Tuesday due to the rumors, before closing at HK$69.70, an increase of 3.7 percent.

China Mobile spokeswoman Rainie Lei said: "I have not heard of any report regarding the A-shares listing application, but our management has previously said the company will go back to the China [stock] market for the listing.

"We also have no news on the China Depositary Receipts application which we made a year ago," she added.

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Red-chip companies in Hong Kong cannot list on the mainland stock markets directly as they are not registered domestically.

By using the CDR approach, foreign companies can bypass this regulation. However, no CDR has ever been issued by the State-owned Assets Supervision and Administration Commission.

Mainland media reported last weekend that China Mobile will issue the A shares by setting up a holding company to hold the A-share assets and act as the parent company, rather than using a CDR as Beijing has yet to fully open the capital accounts, the report said, citing sources close to the company.

China Mobile chairman Wang Jianzhou had previously said he hopes the company could issue A shares at the "appropriate time."

Analysts are skeptical regarding the reports, saying there are some "technical problems" hindering the proposed plan. "It doesn't seem to be a very intelligent rumor," one analyst said. "The market is ignoring some basic facts. If a red-chip company wants to issue A shares, it needs a CDR but there is no CDR right now. What's more, the company doesn't need the money [from issuing A shares]."

Analyst Steven Liu from DBS Vickers Securities said the company will issue A shares sooner or later, but he does not think it will be likely to obtain a CDR before the issuing of the third- generation licenses. "If the government grants a CDR to China Mobile, China Netcom Group (0906) may ask for one as well because it needs the money that issuing A shares would provide. The government is likely to concentrate on the 3G licensing first," he said.

Liu added that China Mobile already has US$172 billion (HK$1.34 trillion) in market capitalization, and the reported target amount which would be raised by issuing A shares is trivial in comparison.

"As a red chip, China Mobile could follow China Unicom (0762) to set up a holding company in the mainland to enable it to issue A shares, but that would not be a very reasonable move as it would increase the operational costs by having to run two companies under the same management team," China Everbright Research analyst Wong Chi-man said.