Evening Analysis: PCCW Drives Index Down
quamnet.com
08 Sep ,2000 - The market retreated again before the weekend break with most major stocks falling slightly due to Hong Kong punters taking some profits. The index fell 156.50 points to 17,275.45 on very thin turnover of just HK$7.875 billion. Today's fall and small turnover, according to a number of co-workers willing to pitch in on a Friday evening article, was due to this evening's Mark Six lottery and horse racing in Shatin tomorrow. Punters were no doubt either pulling money out of the local equity gambling market or simply saving up for bigger jackpot gambling activites. Tonight's mooncake-driven draw ahead of the Mid-Autumn Festival next week is expected to be worth over HK$30 million. The randomly-generated Quamnet lucky numbers are: 1, 6, 8, 17, 19, and 23.
Starting off with number 1, Cheung Kong and the other property players mostly fell today though a few hangers-on managed to close unchanged. Cheung Kong dropped HK$1 to HK$101, Hang Lung (10) fell 15 cents or 1.9% to HK$7.90, Henderson (12) fell 40 cents to HK$43.90, Hysan (14) dropped 15 cents or 1.3% to HK$11.15, SHK (16) fell 75 cents or 1% to HK$73.25, New World (17) was down 30 cents or 2.2% to HK$13.30, and Amoy (101) was down 35 cents or 4.4% to HK$7.60. Swire A (19) and Sino (83) were unchanged at HK$53 and HK$4.20. China Resources (291) at HK$11.60 was suspended from trading today "pending an announcement to clarify news regarding possible acquisition and Group re-organisation." Of the Quamnet lucky numbers, 1, 17, and 19 are properties.
HSBC (5) was not in the office Mark Six pick, and the stock closed down HK$1 to HK$113.50 on turnover of HK$446 million. Subsidiary Hang Seng Bank (11) closed up 25 cents or 0.3% to HK$87.75. Dao Heng (233) fell 50 cents to HK$39.40. The only member of the banking sub-index to be included in the Mark Six line-up was BEA (23). BEA closed up 10 cents to HK$18.65. BEA is HK's third-largest publicly traded bank and was reported late this afternoon to be discussing a possible A share listing on the Shanghai Stock Exchange. The bank said its mainland assets are of good quality and meet the requirements for a listing though they will need to wait until new banking laws are introduced at the end of the year.
China Mobile (941) fell 50 cents to HK$61.25, and China Unicom (762) rose 10 cents to HK$18.55. Unicom released interim results today that were encouraging in that subscriber numbers were up significantly and operating profit looks fairly strong. However, the other side of the picture came from a decrease in the average monthly revenue from subscribers, and churn rate was not mentioned in the announcement. Both PRC telecoms are still trading a very high P/Es. Hutchison (13) rose 50 cents to HK$114.
The next member of our Mark Six pick, number 8, also happens to coincide with the main reason for today's slide. Pacific Century CyberWorks (8) was a big-time loser today as it dropped a significant 65 cents or 4.7% to close at HK$13.20. Turnover overshadowed everything else on the board today at HK$1.07 billion. The sell-off, despite this weekend's upcoming gambling activities, just follows a recent decline. The company said it will exercise share options to increase its stake in CASH On-Line though it is doubtful the relationship with CASH (1049) alone caused the investor panic. Relative Tom.com (8001) also fell today ending down 12.5 cents or 2.5% to HK$4.975. The company is issuing new shares, raising more money, and going on an acquisition binge. In addition, the company said today that it will present the 2000 Olympic Games in partnership with shawei.com, its newly acquired China sports Web site, and eight mainland TV stations. This could be interesting and perhaps a stretch even for Master of the Universe Li Ka-Shing as there is a ban on Internet broadcasting of the 2000 Olympics. We're surprised that Mr. Li hasn't heard of that since it's been in the news though perhaps it was Tom.com's editorial staff fired in a cost-cutting exercise a month or so ago who were in charge of that particular section.
The last lucky number, 6, belongs to HK Electric. The stock was up 5 cents to HK$24.95. Perhaps there are expectations it will cash in on gambling-inspired electricity surges this weekend.
[Disclaimer: Quamnet does not take the Mark Six picks seriously, and neither should you! The numbers were randomly chosen by colleagues though may have been inspired at least self-consciously by the market] |
