China Telecom cuts size of IPO by 55% | FT

China Telecom, the mainland's largest fixed-line operator, sought to resurrect its initial public offering on Thursday by drastically scaling back the size of the listing to US$1.66bn from as much as US$3.68 bn.

Selling fewer shares effectively reduces the company's price-to-earnings ratio, making the new issue more reasonably priced compared with listed Chinese telecommunications companies. The company's p/e ratio at the low end of the price range is now 9.6-times compared with 10.7-times prior to the downsizing, underwriting sources said.

Fund managers remained unconvinced by the prospects for the company, whose IPO has cast a harsh spotlight on its need for rising capital expenditure and on its unpredictable management. "We weren't interested in it a week ago and we aren't today," said James Squire, a fund manager at Baring Asset Management. more