STOCKWATCH: China Mobile higher in midafternoon trade on bargain-hunting

HONG KONG (AFX-ASIA) - China Mobile (Hong Kong) Ltd shares were higher in mid-afternoon trade amid a weak general market, on bargain hunting, dealers said. They said the previous selldown on the stock on concerns over price competition emerging between China Mobile and China Unicom was overdone. Investors are now seeing a good buying opportunity, they added. At 3:18 pm, the Hang Seng index was down 158.66 points at 13,334.37. China Mobile was up 0.30 hkd at 37.10 on 15.601 mln shares. It earlier hit a high of 38.10 hkd. China Unicom was down 0.30 at 10.05 on 14.168 mln shares. Worldsec Securities telecommunications analyst Betrand Chui said his house has always held an overweight recommendation on China Mobile. "We believe the competition worries were overdone," he said. He said news of the liberalisation of the tariff package plan had resulted in some people perceiving it to be a price cut. "We did not share that opinion. We felt that it was a completely rational and sensible move to capture the larger and unreached portion of the market. It is market segmentation," he said. He said China Mobile's earnings before interest, tax, depreciation and amortisation (EBITDA) was about 9 times its share price, against 12 times the international average for telecommunication stocks.

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