Morgan Stanley and Merrill Lynch are coming under pressure to ensure China Telecom succeeds next week in its second effort to complete a $3.7bn (€3.74bn) initial public offering.

China Telecom, the state-owned fixed line carrier, is to relaunch its IPO early next week after poor demand stalled its first attempt. Bookrunners Morgan Stanley and Merrill Lynch halted the deal on Thursday and are widely expected to restructure the terms over the weekend.