StockHouse @ The Bell : December 8, 2000 HK's Daily Wrap on The Markets
Today in the Markets
Telecoms Lifts Market
Shrugging off the weak Wall Street overnight, the Hong Kong market on Friday closed firm, above 15,000 ahead of the weekend. Leading the gains were telecom shares that had lagged behind interest-rate sensitive plays in recent trading sessions.
The Hang Seng Index rose 177 points or 1.2 percent to 15,189 on a turnover of $10.6b.
Standing out among the gainers was Pacific Century CyberWorks [8] as the stock jumped 8.2 percent to $5.85, off an intraday high of $5.90. The stock was bullish on speculative buying from investors pushing up the share price to boost the Company's two-year warrants issued on Thursday. The warrants [587] surged 57.8 percent to $1.01.
Most active Cheung Kong [1] gained 1.0 percent to $98.75 on a turnover of $1.1b as the market speculated that the property heavyweight will be re-included in Morgan Stanley Capital International's (MSCI) Hong Kong Index. MSCI will announce possible changes on Sunday to weighing companies based on their free float of shares instead of their total market capitalization.
Other telecom counters including China Mobile [941] and Hutchison Whampoa [13] posted gains of 1.3 percent to $48.60 and 1.6 percent to $98.00.
"Telecom heavyweights can hardly be excluded if funds want to push the Index up because properties and banks have already reached their highs," said analyst Josephine Hui of Celestial Asia Securities.
"Utilities hit their new year-high these two days as fund managers cut cash holding ahead of the year end and parked money at safer utility plays," she added.
Hongkong Electric [6] finished Friday at another 52-week high of $28.00, climbing 2.9 percent, after Thursday's record at $27.20. Within the same sector, CLP Holdings [2] and HK & China Gas [3] also gained ground. They climbed 1.6 percent to $37.40 and 3.0 percent to $10.25, respectively.
Interest rate-sensitive banking and property shares continued to edge higher, looking forward to interest rates cuts early next year. HSBC [5] added 0.4 percent to $114.50, while subsidiary Hang Seng Index [11] put on 1.9 percent to $95.75.
Amoy Properties [101] softened 1.3 percent to $7.85 after yesterday's rally boosted by its successful bidding of a West Kowloon residential site. Henderson Land [12] and Sun Hung Kai [16] rose 2.0 percent to $35.80 and 1.1 percent to $70.25, respectively.
Outperforming the market was laggard First Pacific [142] as it soared 7.3 percent to $2.20. Johnson Electric [179] fell 2.3 percent despite posting a 22 percent increase YoY in interim net profit at US$80.26m
Market Preview
A fresh wave of decisive court rulings to be announced on Friday may determine the final winner in the US presidential election saga. Moreover, the US unemployment data for November, due for release tonight, may further confirm hopes of an early interest rate cut.
"The Wall Street should stage some rallies once George W. Bush is confirmed to be the next US president, while at the same time, some believe the final result in the election race has already been factored into the market," said Ms Hui.
But the series of corporate warnings in the tech sector are likely to restrain Wall Street's upside in the near future, which may shadow trading sentiment in the local market.
STOCK WATCH
HOT STOCK
Yizheng Chemical Fiber Company [1033] may rise as the Company's profit margin could increase following a 10-percent drop in raw materials costs.
COLD STOCK
China Merchants Holdings International [144] may face pressure, as the Chinese transportation authorities are about to open its highway construction business to all corporations, which is to reduce its parent's future investment opportunities.
StockHouse Financial News
Pro Picks: CSC Securities' Kenneth Lau Picks Three Telecoms For The Long Term
By Agnes Tsang
Investors should look past the current uncertainty surrounding the telecoms sector and focus on the longer-term picture - is advice from CSC Securities' telecoms specialist Kenneth Lau. Despite the recent roller coaster ride of Hong Kong's telecoms counters, Mr Lau reminds investors not to overlook the huge growth potential of China's mammoth telecoms market. CSC Securities is Taiwan's second largest brokerage house. It has a strong institutional client base and has recently expanded its operations in the SAR.
Full Story
China Resources Enterprises: Strengthening Its Return Profile
By Maryanne Truong
Six months ago, China Resources Enterprises [291] announced a strategy of restructuring and repositioning itself as a distribution company. Since then, the listed flagship of China Resources Holdings, which is directly controlled by China's Foreign Trade Ministry, has proposed three transactions to enhance its distribution strategy. The latest proposal to privatise its listed food distributor Ng Fung Hong [318] is an unprecedented step by a red chip conglomerate. Moreover, the move offers China Resources Enterprises immediate strategic and EPS enhancement benefits and as such, investors should view it positively.
Full Story
Sino Land: Buying High Selling Low
By Alice Poon
In August 1996 and March 1997, Sino Land [83] separately made two sizable land purchases at what now, in retrospect, seem to be exorbitant prices. The respective purchases were a 42.5-percent interest in Olympian City Site B (Park Avenue and Central Park), a joint venture development project with the MTR Corporation [66] adjacent to the Airport Railway Olympic Station, and a 40-percent interest in an auctioned site at Siu Sai Wan (Island Resort). These projects are both due for completion in 2001, meaning potential losses amounting to some $3.3b, will have to be booked in the FY2001 and FY2002 accounts.
Full Story
Cheung Kong Infrastructure: Technology Projects Add Zest
By Alice Poon
Year 2000 will be remembered as a bumper period for Cheung Kong Infrastructure [1038] in terms of new investments and new joint ventures. Of these, the most interesting and most likely to act as a future growth impetus for the Company are the technology-related joint ventures with Israel-based On Track Innovations (OTI) and Canada-based Stuart Energy [T.HHO]. OTI is involved in contactless smart card technology while Stuart Energy has a patent to produce hydrogen fuel that is deemed a much better alternative to petroleum and fossil fuels.
Full Story
Hung Hing Printing - Old Economy Value
By Agnes Tsang
It's far from being sexy and garners little attention but Hung Hing Printing [450] delivers. Consistent double-digit earnings growth, attractive valuations and a crystal-clear balance sheet make this oldest of old economy companies an attractive haven for those retail investors seeking refuge from the turbulence of the new economy.
Full Story
Vanda Systems: Down To The Essentials
By Robert Li
Talk about a reversal of fortunes. In a matter of months, technology stocks have been transformed from the darling of investors to market pariahs. Few companies in the sector have been spared, from hastily assembled dot.com plays to genuine technology companies, such as Vanda Systems & Communications [757]. The share price of the system integrator currently sits 86 percent off its 52-week high of $8.60 set on February 22.
Full Story
K Wah International: Not All Good Things Come In Small Packages
By Alice Poon
In a bid to convince the Government to split larger auction sites into smaller parcels to enable smaller developers to compete on a more level playing field, K Wah International [173], in September this year, took the lead in mobilising weaker industry players to make a concerted effort to counter the big boys' influence on government land policy.
Full Story
Founder Holdings: Biggest Isn't Always Best
By Elaine Chan
Being the biggest isn't always a sure bet as China's largest electronic printing systems developer, Founder Holdings [418], is finding.
Full Story
News in Brief: Editor's Selection
CLP To Buy Powergen Assets In Asia For $843 Million
CLP [2], Hong Kong's biggest electricity company will acquire generation assets in Asia worth $843 million from Powergen of the U.K., more than doubling the company's power-generating capacity outside of Hong Kong.
Full Story
Hong Kong Auction Signals Spotty Property Recovery
Amoy Properties [101], Hong Kong's No. 4 developer paid HK$2.58 billion for a large piece of land near the Kowloon waterfront in Hong Kong's latest land auction, casting doubts on developers' claims that apartment prices are certain to rise next year.
Full Story
Dickson 1H Net Down 90.6% To HK$30.8 Million
Dickson Concepts [113], an upmarket fashion retailer posted a 90.6% drop in net profit to HK$30.8 million for the six months through September from a year earlier as last year's bottom line was distorted by one-time profits.
Full Story
Jiangxi Copper Seeks $1.6 Billion For Expansion
Jiangxi Copper [358] is planning to spend an estimated 1.8 billion yuan through an initial issue of A shares in Shanghai and through bank loans in order to expand capacity and to acquire and develop new mines.
Full Story
Retail Report
E-retailers Urged To Alter Strategy
Retailers must shed outdated business models and adapt their businesses to the consumer if they are going to make it in the online marketplace, according to the president of the Electronic Retailing Association (Era).
Full Story
China Report
Exports Rise, Trade Surplus Buoy Outlook For Beijing
Beijing yesterday predicted that its trade sector for the full year would grow at its fastest yearly clip since 1995.
Full Story
Property Report
King's Hill Prices Trimmed
Henderson Land Development [12] has reduced the prices at its luxury residential project, The King's Park Hill in Ho Man Tin by more than 23%.
Full Story
Company Report
Hutchison Paves Way For Float Of Indian Holdings
Hutchison Whampoa [13] is seeking to consolidate its four Indian mobile assets into a holding company with local partners, Essar Teleholdings and finance firm Kotak Mahindra.
Full Story
Disclaimer: The StockHouse @ The Bell is an independent electronic publication committed to providing StockHouse members with factual information on selected publicly traded companies. (Continued)
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