Friday, January 04, 2008

H- Shares Lined Up For A Shanghai Listing

As mentioned before, those H-shares going for a Shanghai listing have a much better upside than the rest of the H-shares. However, the corrective phase in China markets over the last 2 months have caused some of them to be postponed till they get better sentiment.

Things appear to be moving again, but with some reshuffling and changes. A month ago, it was supposed to be CNOOC followed by Zijin Mining. Now, there appears to be a new frontrunner in China Mobile - possibly the best China stock to own with or without the A-share listing.

China Mobile, whose US$341 billion market value makes it the largest telephone carrier, and CNOOC Ltd, China's third-biggest oil company. China Mobile is "actively" seeking a listing on the mainland, Chairman Wang Jianzhou said recently. Hence just these two could carry and create a sentiment change, especially China Mobile.

For better choice of exposure, one should go and buy in HKSE for the covered warrants. Below are some commentary on the covereds on these 3 companies:

1) China Mobile: China Mobile- c5, c6 & c7 are fair valued and would represent good exposure into June/July, can hold for a few months. For more speculative purposes, the China Mobile-c4 looks interesting with low single digit premium and will only expire in March 28.

2) CNOOC - Just switch to CNOOC-c2.

3) Zijin - Even though I knew the stock was lined up for a Shanghai listing, the covered warrant Zijin-c1 NEVER reached even decent value, it was always traded hugely expensive, very expensive or quite expensive. Even today its premium is still above 25% with a poor gearing. Wait for a Zijin-c2 or c3.


Huang Shze Jiun said...


Would just like your opinion on why an A-share listing will pull up the h-share listing.

Logically to me it should not make a difference, i can't see any direct changes impacting the h-share owners. To me it seems no different than a bonus issue, in fact even less so.

Would appreciate your more informed view.


Salvatore_Dali said...


pls search for "H-shares" and "A-shares listings" in my blog, you will find the respective postings to answer yr queries. Readers of this blog made a lot of money from Petrochina experience.

digitalinvestor said...

Hello Salvatore, chmobil-c6 should be out of your recommendationdue to very high premium and also high conversion ratio. Agreed with you on fact chmobil-c6 is much higher prem than Zijin.

Salvatore_Dali said...


i know china mobile-c6 has a slightly higher pm than zijin even ... but at least it has a decent gearing plus it looks like china mobile will be first in the queue for shanghai, and it looks like zijin will be following after cnooc, so the time to expiry does not do zijin-c1 any good.

traderchan said...

i still remember the when zijin was listed, it was trading with a 50% premium for few weeks, people rather buy cheap warrants (in monetary terms) with high premium low gearing and forego those with close to 0 premium and ok gearing.

xatomic said...

The market now swings more than the steepest rollercoaster in the world..

what is gonna happen to the HK market with the release of weak US employment data?

Hain Kuon said...

I agree with chan, taking petrochina-4 and C5 as example. Ppl is still chasing petrochina-C5 with premium of 30% just because it is relatively cheap..unbelievable. I read Dali's article last weekend mentioning about capping the CW and i couldn't agree more.

ONG said...


I guess it's China Coal's turn for Shanghai IPO right after Zijin Mining... Reuters has reported about this an hour ago..

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