Lenovo shares rise after daily report of A-share listing

Shares of Lenovo Group Ltd (聯想), the world's third-biggest maker of personal computers, rose after a newspaper said the company could sell new stocks in China.

The stock rose 5.14 percent to close at HK$3.07 in Hong Kong, after gaining as much as 5.8 percent. That compared with a 0.05 percent decline in the benchmark Hang Seng index.

The Chinese government could soon approve plans by Lenovo, China Mobile Ltd (中國移動通信) and CNOOC Ltd (中國海洋石油) to sell yuan shares worth between 8 billion yuan (US$1.04 billion) and 16 billion yuan each in domestic stock markets, the South China Morning Post reported yesterday, citing unidentified sources.

Under Chinese securities rules, the companies -- so-called red chips -- are not allowed to sell yuan shares in China as they are incorporated outside the country.

Fan Fuchun (范富春), vice chairman of the nation's stock regulator, said on March 15 red chips could be able to sell shares in China by the end of this year.

"Lenovo stock is likely to benefit if the company gains approval to list in China, as PC makers listed there are trading at far higher valuations," said Joseph Ho, an analyst at Daiwa Institute of Research in Hong Kong. "Lenovo is likely to sell old stock as the company doesn't have any funding needs."

Angela Lee (李淑賢), Lenovo's Hong Kong-based spokeswoman, declined to say whether the company is planning to sell yuan shares.

"The company does not comment on market speculation," Lee said by telephone.