CHINA Unicom Ltd rose the most in six weeks in Hong Kong trading yesterday after Goldman Sachs Group Inc said minority shareholders at the mobile-phone carrier will gain from a revamp of the nation's telecommunications industry.
The shares climbed 7.5 percent to HK$17 (US$2.18) at the end of trading, the biggest gain since January 23. Hong Kong's benchmark Hang Seng Index was little changed, said Bloomberg News.
Unicom and China Netcom Group Corp will be "the main beneficiaries" of government plans to reorganize the nation's phone industry, Goldman Sachs analysts Helen Zhu and Lucy Liu wrote in a report yesterday. They expect Unicom, China's second-biggest mobile-phone carrier, to merge with Netcom after selling its smaller wireless business to China Telecom Corp.
The revamp may be announced between the second and third quarters and completed by the end of the year, according to the report. Unicom has "the upper hand in transaction pricing," as the company requires approval from minority shareholders, the report said.
A reorganization may allow fixed-line carriers China Telecom and China Netcom to enter the faster-growing wireless communications market.