SHANGHAI (Reuters) -China Telecom Corp surged 34% on its Shanghai debut on Friday, defying a bearish market after raising $7.3 billion in the world’s biggest stock listing so far this year. Shares of the Chinese telecom giant, which is blacklisted by the U.S. government due to alleged links to the Chinese military, opened 5.7% higher and rose as much as the bourse’s 44% limit on new shares before giving up some gains. The stock ended the session at 6.11 yuan, up from an offer price of 4.53 yuan, in a surge that was conspicuous in a weak market that saw China’s blue-chip index shed nearly 2%. “When money is hard to be made elsewhere, newly-listed China Telecom easily becomes the target for speculators,” said Li Runze, an analyst at Soochow Securities. The rally was hardly driven by fundamentals, he added, as China Telecom’s Hong Kong-listed shares slumped nearly 5% on Friday, trading at just half of the price of their Shanghai counterparts. Liam Zhou, founder of Shanghai-based hedge fund Minority Asset Management (MAM), said that in the short term, China Telecom’s Shanghai share price will also likely draw support from the so-called “green shoe” over-allotment mechanism, as well as its state shareholders. The deal is the biggest A-share listing since PetroChina Co Ltd’s $8.9 billion Shanghai float in 2007, according to Refinitiv data. China Telecom, which was kicked off the U.S. stock exchange in May, had raised 47.1 billion yuan ($7.3 billion) in Shanghai as it broadened its funding channel at home. In its Shanghai offering, China Telecom - the country’s largest fixed-line telecoms operator - attracted a score of strategic investors, including tech giant Huawei, data security company DBAPPSecurity Co and Bilibili Inc. The debut follows a growing number of U.S.-listed Chinese companies that are selling shares publicly in Hong Kong or mainland China amid Sino-U.S. tensions. State-owned rival China Mobile has also applied to list in Shanghai, while a unit of China United Network Communications Group (China Unicom) was listed in 2002. BLACKLISTED “These companies have a lot of money and there is an objective for high payout ratios,” said Quiddity Advisors analyst Travis Lundy, who publishes on Smartkarma. “They have some revenue and earnings growth still to come, they are stable ... that will make them attractive to investors.” China Telecom’s debut comes days after the company reported a 27.2% jump in its first half earnings. It also promised to raise the cash dividend ratio to 70% or above within three years of its Shanghai listing. The New York Stock Exchange delisted China Telecom, China Mobile Ltd and China Unicom Holdings from the bourse after the three firms were blacklisted under the former Trump administration in November last year. The three firms were part of a list of 31 companies the United States blocked investment in because the government said they were owned or controlled by China’s military. Earlier this week, China’s securities regulators accepted a domestic listing application from China Mobile, which aims to raise 56 billion yuan. China United Network Communications Ltd < 600050.SS>, a unit of China United Network Communications Group, went public in Shanghai in 2002. ($1 = 7.7910 Hong Kong dollars) Reporting by Shanghai newsroom and Scott Murdoch in Hong Kong; Editing by Uttaresh.V, Sam Holmes and Susan Fenton Our Standards: The Thomson Reuters Trust Principles.