MARKET TALK-HK: Schroders Stays Bullish On HK...
0825 [Dow Jones] Despite recent swings in markets, HK and Japan remain good places to buy stocks, including tech stocks, says Schroder Investment Management. Schroder remains confident in HK, but recommends concentrating on management: investors seeking value in old economy stocks should focus on those with management able to take advantage of new technology, says Tina So, China/HK fund manager for Schroder. Schroder expects HK's recovery to continue, and Hang Seng to head toward 19000 this year; recommends going overweight in HK and Taiwan on tech and telecoms stocks.
China should benefit from improved technology and cyclical recovery as its restructuring progresses, So says.(RXM)
0822 [Dow Jones] Merrill Lynch expects Taiwan stock index will fall to 7500-7800 (as much as 14%) vs 8763 close Friday in wake of election result, according to CNBC Asia's Squawk Box program. Merrill sees stocks languishing in 7000s this week before move perhaps back toward 10000 on inclusion in MSCI index. Some Taiwanese brokerages expect fall of 4%-5%.(BIP)
0820 [Dow Jones] Finance minister Paul Chiu said Sunday lower limit on stock price movements on main board, OTC market and futures will be cut to 3.5% from 7% for two weeks effective today to stem post-election volatility. Upper limit still 7%. Steering committee of stock stabilization fund will meet before today's open to determine if fund should enter market.(CLT)
0818 [Dow Jones] Taiwan may be in for period of extended domestic political uncertainty; Lien Chan's crushing election defeat means KMT, which still controls legislature, is in chaos (during campaign Lien said he'd push KMT to put business assets in trust, but with party in disarray it may not be able to perform this complicated process). Maverick James Soong's achievement in coming close second caused him to decide to form own party.(TGM AXT)
0816 [Dow Jones] China stock markets unlikely to be hurt much if at all by Taiwan election result, due to Beijing's calm reaction, traders say. Note 10% rise Friday in A-shares of Xiamen Airport Devt; Xiamen is across from Taiwan and company would benefit from closer ties with Taiwan. This suggests investors may focus on positive aspect of Chen's victory, his call for discussion of direct Taiwan-China transport links.(AXT)
0814 [Dow Jones] Chen Shui-bian's election carries potential for Taiwan-China conflict but early signs are both sides will give each other chance to mend ties. Chen made very conciliatory speech, avoiding inflammatory rhetoric and offering to visit China and discuss direct transport links. China Communist Party was calm: "as for the new Taiwan leader, we'll wait and see what he says and does for cross-strait relations." Beijing likely to monitor Taipei for months before deciding any action.(TGM AXT)
0812 [Dow Jones] Taiwan economic policy unlikely to change much under Chen Shui-bian, at least initially; DPP doesn't have expertise to form own economic policy now and will have to use professional bureaucrats. Central bank governor has three more years in term and not expected to step down; DPP doesn't have obvious candidate for finance minister so government advisory board expected to choose before May 20 inauguration. Chen's record as Taipei mayor implies he'll be efficient and crack down on corruption, which could be good for economy long-term.(TGM AXT)
0810 [Dow Jones] Taiwan markets set for bumpy ride this week but analysts think they'll stabilize or even begin rebounding by week's end. "The stock market will probably tank on Monday but bounce back by Friday," says Peter Tsao, head of Asian tech research at ING Barings; "the smart money will step in and start buying on Tuesday." Some capital outflow likely, but central bank expected to support Taiwan dollar; money market rates and bond yields may rise, but only moderately given good market liquidity.(TGM AXT)
0809 [Dow Jones] HK SHARES FRIDAY: Shares slightly lower in London, with players on sidelines after volatile week for global tech markets. Hang Seng London reference index fell 45.80 to 17037. HSBC (0005) fell to around $89.50; despite lackluster performance, a London-based analyst says momentum indicators remain bullish and outlook upbeat for company. In New York's ADRs trade, HSBC fell 3.6% to US$56.50 (equivalent to HK$87.91), C&W HKT (0008) was down 2.2% to US$27.88 (equivalent to HK$21.69) and Sunday (0866) down 7.3% to US$13.69 (equivalent to HK$3.55). i-cable (1097) was up 6.6% to US$17 (equivalent to HK$6.63), China Telecom (0941) up 6.7% to US$176.75 (equivalent to HK$68.76), Cheung Kong (0001) up 5.4% to US$13.62 (equivalent to HK$105.96) and Hutchison (0013) up 2.3% to US$85.10 (equivalent to HK$132.42).(RXM STT)
0806 [Dow Jones] WALL STREET: Blue chips ended lower Friday on profit-taking after Thursday's huge gain; DJIA however didn't relinquish much ground, losing 0.33% to 10595.23 on support from its tech components. Nasdaq gained 1.71%. Data released before trading session showed some increase in consumer prices in February but didn't evidence much inflation in core products measured. Analysts says recent data suggest economic expansion has begun to moderate, Banking stocks didn't have much immediate response to data, but had already gained sharply Thursday.(RXM)
0800 [Dow Jones] OUTLOOK: Dec-Feb unemployment and underemployment figures due out;
1000 Cheong Ming (1196) special general meeting on Sega.com share swap;
1300 Donald Tsang speaks at HK General Chamber of Commerce luncheon;
1500 Standard Chartered press conference on on-line treasury launch;
1600 SIIC Medical Science and Technology (8018) press conference on FY99 results;
Pacific Century CyberWorks (1186) FY99 results; based on Barra Global Estimates consensus figure, CyberWorks' net profit expected to reach $24.2 million.
Hysan Development (0014) FY99 results; based on Barra Global Estimates consensus, expected to post 44% growth in FY99 net profit to $1.29 billion, from $900.4 million in FY98;
Midland Realty (1200) FY99 results; BNP Prime Peregrine expects Midland to post 424% jump in net profit to $54 million from $10.3 million in FY98.(STT)
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