The market will again focus on Hongkong Telecom shares this week amid speculation that Friday's deal bringing in Beijing-controlled China Everbright as a major shareholder is not the end of the story as far as restructuring Telecom's ownership is concerned. China Everbright paid about $11.4 billion for Citic Pacific's 7.7 per cent stake, but the deal failed to meet market expectations of a wider agreement with a Beijing-backed entity to reduce Cable & Wireless's (C&W) 59.1 per cent controlling stake in Telecom. With the handover looming, it is a move that many say is inevitable. Analysts saw Friday's sale as the first part of an eventual wider restructuring of Telecom's ownership. The question now is when will the second part emerge? C&W chief executive Dick Brown was in Hong Kong last week but offered few clues. It was clearly in Telecom's interests to improve its workings with China, he said. 'There are many ways to do this and it would be premature to make any specific comments,' he said. The rumour-mill has been in full swing with talk of an announcement circulating widely before the news of Friday's deal. Despite protestations from Citic Pacific management that the deal was put together quickly and was done for commercial rather than any other reasons, many commentators believed it was part of a wider, calculated strategy leading to a greater Chinese participation in Telecom. Just days ago, few had considered China Everbright anything but a bit-part player in the emerging theatre of the mainland's telecoms industry. In the space of a few hours, its image has been transformed to that of a possible front through which Beijing might take a firmer hold of one of Hong Kong's strategic industries. China Everbright is directly controlled by China's State Council and the deal would seem to streamline the line of influence between Beijing and Telecom's boardroom. Its chief, Zhu Xiaohua, is believed to be in London. More details of his firm's long-term telecoms strategy may emerge on his return. Most interest has focused on its 6.25 per cent holding, along with 15 other state entities, in China Unicom, the mainland's second national operator. Does this indicate an eventual deal that will tie Telecom closer to Unicom than to the dominant ministry of posts and telecommunications? With the current poor relationship between the ministry and Unicom, that would certainly be seen by the market as second best. Telecom's stock ended last week at $14.50, off its highs but well up on most of the last year. The question for investors is whether they can afford to be out of the stock with another deal possibly on the way. 'We have the stock as a short-term sell and buy-back on weakness in advance of another anticipated announcement which could come soon,' a Morgan Stanley source in London said. Other brokerages feel that, while the stock is overvalued on fundamentals, it is worth holding while details of another deal emerge.