Cheung Kong Holdings was looking at setting up the real-estate investment trust priced in yuan in the first half of 2011, the Chinese-language Hong Kong Economic Times said, citing unnamed sources.

Hong Kong, a semi-autonomous Chinese territory, is acting as a test bed for turning the yuan into a global currency.

Last year China approved using the yuan to settle cross-border trade with Hong Kong and Beijing has twice issued yuan-denominated bonds in the financial hub over the past year.

Earlier this month, Beijing said the latest issue had raised five billion yuan (751 million US dollars) from institutional buyers with plans for another three billion yuan to be sold to retail investors.

The move followed Beijing's first yuan-denominated bond issue in the city in September last year, which was worth about six billion yuan.

Heavy equipment maker Caterpillar and fast-food giant McDonald's have both announced plans for yuan-denominated bond issues in Hong Kong.

Cheung Kong's initial public offering would seek to raise about 10 billion yuan in Hong Kong, the Economic Times said, adding that dividends would be paid in the Chinese currency.

"China seems very determined to promote the (yuan)," Frances Cheung, senior strategist at Credit Agricole in Hong Kong, told AFP.

"This offering will present another investment class so it provides a more complete picture... the key is keeping up the momentum."

The ports-to-property conglomerate's share price rose 3.5 percent to close at 120.4 Hong Kong dollars (15.50 US dollars) on Wednesday.

It did not immediately comment on the report.

However, yuan share offerings may not attract the kind of robust demand garnered by Chinese government-backed bonds, with equity investors likely to be cautious about buying anything less than blue-chip stocks, Cheung said.

"They would pay much more attention to the individual names," she added.

Cheung Kong's planned share sale has received initial approval from Chinese regulators including the Ministry of Commerce and State Administration of Foreign Exchange, the Economic Times report said.

The sale of shares in the trust -- which will include shopping malls and hotels -- was arranged with the help of the Hong Kong Monetary Authority (HKMA), the city's de facto central bank, the report added.

The chief executive of Hong Kong's stock exchange has recently said Hong Kong could see yuan-denominated IPOs as early as next year.

Last month, the HKMA said yuan deposits surged 45.4 percent to 217.1 billion yuan in October compared with September thanks to an increase in yuan receipts in trade settlement transactions.

Hong Kong -- on track to be the world's hottest IPO market this year, raising more than 51 billion US dollars -- has seen more than 20 yuan bond issues since 2007, raising over 50 billion yuan, the government said last month.

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