Retail frenzy hits China Mobile IPO

China Mobile (0941) recorded sky-high demand for its Shanghai initial public offering, with its retail tranche 1,384 times oversubscribed, despite the offer price coming in at an over 50 percent premium compared to its Hong Kong shares.

Shares of China Mobile in Hong Kong inched up 0.6 percent to HK$46.6 amid the frenzy. But analysts told investors to be alert for a potential downside of the shares, citing how China Telecom's (0728) A shares fell sharply after it went public.

"China Telecom, which second-listed in the mainland rose nearly 40 percent in the two months before listing, but then fell around 10 percent within a month," said Kenny Ng Lai-yin, a strategist at Everbright Sun Hung Kai Securities.

Meanwhile, China Telecom's US unit said it plans to continue providing some services in the United States in 2022, after a US regulator revoked its authorization to operate telecommunications in the country, citing national security.

The US Federal Communications Commission in October voted to revoke the authorization. The FCC said China Telecom (Americas) "is subject to exploitation, influence and control by the Chinese government."

In a letter to the FCC, the company said the services it intends to continue do not fall under the FCC's order that requires a halt to its common carrier operations. CTA argued that the services qualify as private carriers.

CTA offers consumers mobile service under the brand name CTExcel. The FCC said CTExcel customers need to switch to a new provider by January 3.