Hong Kong Exchanges and Clearing has given the green light to China Telecom's SAR listing, according to sources involved in the deal. The mainland fixed-line giant is planning to raise between US$3.4 billion and US$4 billion through a dual listing in Hong Kong and New York, making it Asia's largest initial public offering this year. The listing is bigger than that of Bank of China (Hong Kong), which attracted US$2.8 billion from local and overseas investors in July. A source said that in order to draw a strong response, the pricing of the shares would be 'very attractive', at an about eight to 10 times prospective earnings. The source said the shares were likely to be selling at below HK$2 apiece. China Telecom has forecast its net profit for next year will be about 17.5 billion yuan (about HK$16.4 billion). The combined factors of a relatively low earnings multiple plus an estimated dividend yield of about 2.5 per cent as a sweetener, mean China Telecom's listing is expected to put pressure on other telecoms stocks such as China Unicom and China Mobile. China Telecom has told analysts that it plans to pay out 20 per cent of its profit to shareholders. Based on yesterday closing price, China Unicom is trading at 14.6-times its prospective earnings, while China Mobile is trading at 11.6-times. China Telecom will sell 16.7 billion new shares to overseas investors, representing 20 per cent of the company's enlarged share capital. It will become a US$17 billion to US$20 billion company after the dual listing. The carrier has packaged the operations in four of its most profitable provinces and municipalities - Guangdong, Jiangsu, Zhejiang and Shanghai - into a mainland-registered company to sell H shares to Hong Kong investors and American Depository Receipts. The share sale is being jointly led by Merrill Lynch, Morgan Stanley and China International & Capital Corp - a joint venture between Morgan Stanley and China Construction Bank. A banking source said China Telecom was aiming to submit its public filing to the United States Securities and Exchanges Commission (SEC) early next week - the final stage of its New York listing application. China Telecom made its confidential filing to the SEC in July, but the company is not allowed to market its shares until it submits the public filing. The global co-ordinators of the multi-billion share sale aim to begin pre-marketing activities early next week to test investors appetite, and to kick off a formal roadshow on October 8. Unlike China Mobile's share offering in 1997 and China Unicom's in 2000, China Telecom will not seek strategic investors as they would be difficult to find given the market sentiment, according to a source. However, the underwriters have approached local tycoons to test their appetite. China Telecom shares are scheduled to begin trading on October 28, with the shares to be priced about five days before that. Meanwhile, sources said CNOOC Services - a subsidiary of China National Offshore Oil Corp - expected to set its listing timetable in about two weeks. The company, which provides logistics supporting services to sister company Hong Kong-listed CNOOC, is hoping to raise US$200 million to US$300 million via a main board H-share listing before the end of this year.