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Tuesday, May 08, 2001, updated at 09:30(GMT+8)

China Unicom to Join Hang Seng

China Unicom has become one of the most influential and frequently traded stocks in Hong Kong's Stock Exchange after going public there a year ago.

The Hong Kong-listed subsidiary of China's second biggest mobile telecom operator, together with MTR Corp, will become a constituent stock of the Hang Seng Index (HSI) on June 1, said HSI Services, the index maker.

HSI is the most respected stock trading index in Hong Kong, and the major benchmark used in evaluating the importance of a public company.

The 33 member companies of the index are selected from all the public-listed stocks according to their market capitalization, turnover rankings and financial performances.

They occupy 70 per cent of the total market value of all the listed companies in Hong Kong's Stock Exchange. Becoming an HSI constituent indicates a company's influence.

Most of the so-called "elite" companies are included in the HSI composite like HSBC Holdings and Cheung Kong (Holdings).

China Unicom is the third mainland company to become an HSI constituent after China Mobile (HK), the country's top mobile telecom operator, and Legend Holdings, the top computer vendor in the Asia Pacific region.

Becoming a corporate in 1994, China Unicom was formed by the government to break the monopoly in the telecom sector.

It is the country's sole multi-functional telecom operator and can provide mobile, fixed-line, paging, data transportation and Internet access services.

Encouraged by preferential policies, the company has reported rapid growth in recent years especially after going public last June.

China's mobile telecom market, which doubled its size last year to obtain 85 million users, will be China Unicom's major direction in the coming few years, the company said.

It now controls over 22 per cent of the country's mobile telecom market and has become a strong rival of the dominant China Mobile.

China Unicom plans to finish building a nationwide CDMA (code division multi access) network before October, which will provide better voice and data transportation quality and higher speed than the present GSM (global system for mobile communication) network.

"Being an HSI constituent means China Unicom has won acceptance and support from the market," said a statement from the company. "We will hurry up the business expansion and give more profit to the investors."

Encouraged by the news, shares of China Unicom and MTR Corp were up sharply in Monday's trading.

China Unicom's shares surged 8.62 per cent to HK$12.60 (US$1.6), after reaching a high of HK$13.05 (US$1.7) shortly after the opening.

Shares of MTR Corp were up 6.59 per cent at HK$13.75 (US$1.8), after climbing to a high of HK$14.10 (US$1.81) earlier in the morning.

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China Unicom has become one of the most influential and frequently traded stocks in Hong Kong's Stock Exchange after going public there a year ago.

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