Given the large size of the deal, analysts say the modest gain was in line with their expectations. China Unicom raised $4.9 billion last week in the nation's largest IPO outside of Asia. It sold 13.9 million shares of its American depository receipts at $19.99 each.
"Big deals are hard to see much appreciation in the first few days," said Richard Peterson, an analyst with Thomson Financial Securities Data. "Here you have an abundance of shares outstanding, so there's probably enough to satisfy investors and not enough momentum to push the stock upward."
China Unicom is among an increasing number of foreign companies turning to U.S. markets to raise money. Approximately 31 percent of all the dollars raised this year in initial public offerings have come from foreign issuers, compared with 20.8 percent last year, according to Peterson.
"It indicates that the foreign issuers are finding U.S. capital markets very attractive to raise money," Peterson said.
As China prepares to join the World Trade Organization, some analysts suspect the number of foreign companies looking to American markets for money will only increase.
"You're going to see a lot more of these companies come out," said Jeff Hirschkorn, senior market analyst with IPO.com. "Next week alone we have five foreign deals on the calendar out of 18."
China Unicom generated revenues of $2 billion last year and posted profits of $89 million. It had 4.2 million cellular customers at the end of last year--up from 338,900 in 1997, making it the second-largest cellular-services provider in Asia.
China Unicom, which competes directly with China Telecom, also is the largest paging company in Asia and offers data services in 50 cities in China. The company plans to use some of the proceeds from its IPO to expand its operations to 220 cities by the end of the year.
Shares of China Unicom trade under the ticker "CHU." Morgan Stanley Dean Witter handled the sale.