UPDATE 2-PCCW <0008.HK> slumps 4.17 pct after jv deals hit snags
Reuters
(Updates with closing price, short-selling details)
HONG KONG, Sept 11 (Reuters) - Shares in billionaire Richard Li's Internet and telecom firm Pacific Century CyberWorks sank to their lowest level in nearly five months on Monday as investors offloaded the stock following high profile withdrawals from two joint venture deals.
PCCW shares finished down 4.17 percent or HK$0.55 at HK$12.65 on heavy turnover of HK$1.4 billion which made it the most actively traded stock. The shares are down 55.6 percent from a high of HK$28.50 in February but still 105.7 percent higher than they were one year ago.
"There are so many reasons recently that have caused the fall in share price," said Alan Pau, associate director at South China Securities, who said he expected support at HK$12.50.
Last week, Boston-based CMGI <CMGI.O> said it was pulling out of a US$1.5 billion Internet venture fund it had planned to form with PCCW and another U.S. investment firm.
Also last week, Taiwan's Gigamedia Ltd <GIGM.O> said it had decided not to acquire shares of ERA Communications Co Ltd in a three-way deal to form a broadband multimedia Internet content and distribution joint venture with PCCW and ERA.
Market watchers said CMGI's pull-out raised worries that other PCCW joint venture agreements may suffer similar fates.
"The abandonment of the agreement between PCCW and CMGI is bad news," said Andrew To, sales director at Tai Fook Securities. "That will hurt the sentiment," he added.
The stock has fallen 20 percent in the last month, also weighed down heavily by fears Cable & Wireless Plc <CW.L>, the former parent of PCCW's merger partner Cable & Wireless HKT, would soon offload its shares in the newly-merged company.
"It's quite attractive now that it's fallen to this low level, but there's still the overhang," To said.
Its share has also in the past week frequently topped the list of stocks which were sold short. On Monday, the stock again emerged as the most heavily short sold stock with HK$82 million worth of shares sold as many investors expect the share price to fall further.
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