FOCUS-Legend shares soar on PCCW deal, index talk
finet.com.hk
20:03 03-MAR-2000
FOCUS-Legend shares soar on PCCW deal, index
talk
By David Lawder HONG KONG, March 3 (Reuters) -
Shares in Chinese computer maker Legend Holdings
continued their upward charge on Friday as enthusiasm for
its deal with Pacific Century CyberWorks <1186.HK>
bloomed into speculation about Legend's inclusion in a
major index. Legend <0992.HK> shares soared over 31
percent to a record HK$59.50 before closing up 10 percent
at HK$49.80 on Friday.
That capped a stunning 40.8 percent two-day gain that turned the company into one of the
ten most valuable on the Hong Kong stock market, with a market capitalisation of HK$88.54
billion (US$11.38 billion).
"The shares were pushed up by the news about PCCW and speculation that Legend will be
included in the MSCI index," said Ricky Tam, research manager at Delta Asia Securities.
Morgan Stanley Capital International said in late January that it was contemplating changes
to its MSCI China Free Index to include Hong Kong-listed Chinese companies.
China Telecom (Hong Kong) Ltd <0941.HK> has gained significantly on speculation that it
will be added to the index. LEGEND HAS NOW EXCLUSIVITY But the rally was
launched by Legend's exclusive parnership to supply PC hardware for the China rollout of
PCCW's ambitious Internet and television project, Network of the World (NOW). Under the
deal announced on Thursday, Legend will market Legend-NOW brand personal computers
with built-in cable modem, allowing one-button access to the NOW network, which will offer
digital video viewing with simultaneous high-speed Internet access and embedded links
between the two. Non-Legend PCs will not be able to access the service, giving the red-chip
computer maker a major market advantage.
"What PCCW is trying to do is create the next generation of Internet and television," said
Gregory Feldberg, head "convergence" analyst for Indosuez W.I. Carr Securities.
"It's the biggest startup in the world. MURDOCH SAYS COMMITTED TO VENTURE
NOW's fortunes got a boost on Friday when News Corp executive vice-president James
Murdoch said in Beijing that his company was "very committed" to keeping, and possibly
expanding its joint venture with Cable & Wireless HKT <0008.HK>, despite the latter's
pending merger with PCCW. The future of the partnership was thrown into doubt when
News Corp backed Singapore Telecom's losing bid for C&W HKT early this week. If it
continues, PCCW would have access to Star TV's vast array of programming.
Murdoch said he had met with PCCW chairman Richard Li and ..."we both agreed we're
very committed to it." His father, News Corp chairman Rupert Murdoch, is expected to
discuss the issue with Li next week in Hong Kong. PCCW shares rallied on the news, ending
the day up 5.8 percent at HK$21.90.
C&W HKT shares <0008.HK> finished up 6.52 percent at HK$23.70.
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