China Unicom, the mainland's second largest telecommunications operator, surged 12.38 per cent yesterday on rumours it was placing shares with strategic investors at a rich premium to the share price.
The rumours arose from a Wednesday news report that the group was considering selling a minority stake to one of several foreign companies, including NTT DoCoMo, Deutsche Telekom and AT&T Wireless.
In the morning session, talk that the shares would be placed to strategic partners at HK$14.80 each quickly lifted the stock by as much as $1.55 to a high of $12.85.
'There was strong buying after the rumour began spreading - investors just used it as an excuse to chase after a market laggard,' Vickers Ballas (Hong Kong) sales director Steven Leung Wai-yuen said.
China Unicom executive director Li Zhengmao denied the rumours, saying the company had yet to begin talks with potential strategic investors.
However, he reiterated the intention to forge a partnership with a global telecommunications player.
The counter was heavily traded, with 52.98 million shares changing hands, more than double this year's daily average of about 23.53 million shares.