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.