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Opinion: why China Mobile must come clean

Date: 09 Mar 2010

The world’s largest mobile telecoms operator should divulge the real reasons behind its plan to buy a stake in Shanghai Pudong Development Bank or risk seeing billions more being wiped off its market capitalisation.

Keywords (click to search): [Editorial] [China Mobile] [Shanghai Pudong Development Bank] [Tim Smart] [Macquarie]

Aaron Pan
China Mobile’s reasoning for seeking to buy a stake in a Shanghai Pudong Development Bank has failed to win over shareholders and analysts so far.

Quite why is a mobile telecommunications operator wants to buy a holding in a mid-sized Chinese bank is anyone’s guess.

The official line from the company is that it is part of a plan to diversify into the electronic commerce and mobile banking business, lifting earnings in the long term and creating value for shareholders.

But China Mobile investors remain to be convinced and are clearly concerned that the company is venturing too far into unchartered territory.

The firm’s shares have dropped 4.4% since the plans were first announced...

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