China Telecom (Hong Kong) shares yesterday jumped 7.69 per cent after investors bought back into the stock after a successful global fund-raising exercise helped attract investors. The stock finished trading at HK$26.60, a 10.37 per cent premium on Thursday's price of $24.10 for the placed shares. The counter had fallen in recent weeks due to concerns that the impending placement would exert downward pressure on the stock. 'Obviously with the placement overhang out of the way . . . the counter can resume its upward trend,' said Celestial Asia Securities director Eugene Law Ka-kin. The spread on the US$600 million bonds issued tightened 10 points to 180 basis points above United States treasuries during its first day of trade yesterday. China Telecom's global bond issue was the first by a mainland corporate since the start of the Asian crisis in July 1997. The 190 basis point pricing spread was tighter than expected after initial expectations of about 200 points and was seen as successful given the recent strength of US treasuries. The bonds had a net yield of 7.94 per cent. Asian investors and institutions accounted for 45 per cent of the bond while US investors took 35 per cent and Europeans made up 20 per cent. Book-runners were surprised by the strength of international bidding for the bond. They are often scared off by virtue of the fact Asian investors are normally prepared to pay more for regional bonds. 'Compared to Asian investors, what the US and European investors were willing to pay was equally strong,' said Merrill Lynch Asia-Pacific head of Asian debt syndication Rick Stoddard. Merrill Lynch, Chase and Bank of China International were the joint underwriters of the bond issue. 'China Telecom has set a new benchmark for Chinese corporate issuers,' said Chase's head of debt capital markets in Asia, Bob Fernandez. However, other debt specialists were uncertain the bond would become a benchmark. 'China Telecom is a bit different because it is a Hong Kong incorporated company and is listed in Hong Kong,' said Paribas corporate analyst Eden Wong. Analysts said China Telecom's strong growth story outweighed any investor concern about country risk. 'The company has a very strong financial profile being the leading mobile operator in China's telecommunications market,' Mr Wong said.