"It is hard to change the regulations under the current circumstances, but red chips can find a back door," said Li Yongsen, a professor with Renmin University of China.

A man walks past the electronic board of a bank showing the Hong Kong share index yesterday. Hong Kong stocks hit a record high. [China Daily]

Once the red chips return, they are expected to lead the market's growth in 2007, analysts say. "The red chips should return as soon as possible as the flood of new funds into the A-share market has created a great demand for new shares on the supply side," said Zhao Jianxing, with China Merchants Securities.

China Mobile is likely to become the first overseas incorporated company to list in Shanghai.

The telecom carrier, the largest among all the overseas listed mainland companies in terms of market value, is expected to launch its A-share listing in the first half of 2007, a local media report said.

It said the telecom carrier has already chosen its underwriters to sell A shares. The company's spokesman however later denied the news.

The report also said the company had chosen to directly issue A shares in Shanghai, abandoning its former plan to issue Chinese Depositary Receipt, a certain amount of investment units comprised of Hong Kong shares sold to A-share investors.

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