Monday, December 11 12:04 PM SGT MARKET TALK-HK:SuneVision Better Than PCCW Unit iLink
1203 [Dow Jones] Pacific Century CyberWorks (0008) flat at $5.85, not reacting to unsourced Oriental daily report its spinning off data center subsidiary iLink.net on GEM board. Report puts value of iLink.net at about $2-$4 billion. Voon Lai, analyst at GK Goh, says valuation close to analysts' forecasts; notes closest comparison SuneVision (8008) has market cap of $6.54 billion; analysts say SuneVision has better prospects and its data center has higher occupancy rate. Retains outperform rating on PCCW.(STT)
1156 [Dow Jones] Premium of Hang Seng December futures over spot narrows to 71 points from over 100 points earlier today as buying orders from traders subside, says futures trader at European brokerage; notes most traders not taking long positions amid subdued turnover in spot market and uncertainty about U.S. markets' performance tonight. Trader positive however as few fresh short orders opened at current levels, signaling downslide limited; psychological bottom for December futures estimated at 15000; now up 0.5% at 15390.(STT)
1151 [Dow Jones] HKMA and HSBC launch new HK$1,000 note with features to deter counterfeiting; note, which will start circulation next Monday, will have same motif but include visible holographic window thread, watermark showing number 1,000 and embedded fluorescent fibers visible under ultraviolet light. HKMA Chief Executive Yam says move follows increase in rate of discovery of counterfeit notes this year; suitable new security features will also be applied to notes from other 2 note issuing banks.(EAR)
1142 [Dow Jones] Skyworth Digital (0751) up 3.7% at 42 cents, likely on news long-time Giordano (0709) senior executive Jimmy Chan will join company; Skyworth shares were hit by loss warning on Nov 15 and had been languishing around 40 cents level; company currently diversifying away from highly competitive TV set manufacturing. Giordano shares flat at $3.625; rumors about Chan's departure circulating for weeks.(IVW)
1139 [Dow Jones] Potential major legal issue for airlines globally: Australian law firm Slater & Gordon has taken intial instructions on behalf of 6-10 passengers over "economy-class syndrome" on several major airlines including Singapore Airlines, Qantas, Air NZ and Emirates; says syndrome caused by sitting in cramped conditions for long periods of time, leading to severe clotting, strokes and death. Spokeswoman says firm has had "a couple of hundred" phone calls this morning following media coverage over weekend; while at very preliminary stages, may raise concerns about impact on airline sector.(LXV)
1125 [Dow Jones] China Mobile's (0941) current 40% market cap weighting in MSCI China Free Index and MSCI Far East Free (Ex-Japan) Index may be further lowered when MSCI implements free-float weighting system in two phases starting November 2001. China Mobile now has free float of less than 25% (given parent China Mobile Communications Corp owns 75.5%, while Vodafone has another 2%). However company says in statement "any impact on the company's share price from the proposed adjustment by MSCI is expected to be short term," citing unaffected company fundamentals. Shares now up 1.1% at $47.10.(KWW)
1115 [Dow Jones] Johnson Electric's (0179) 1H00 net profit 2% lower than Salomon's forecast; analyst Belle Chan thus revises down FY00 earnings forecast by 8.5-14% due to cautious outlook for auto component sales; suggests caution on Johnson; thinks stock expensive compared to peers. Stock now down 3.1% at $12.60.(IVW)
1101 [Dow Jones] Hang Seng December futures' premium over spot steady above 100 points, supported by buying by day traders and retail investors, says futures trader at Fimat. Buying orders however light, suggesting sentiment still cautious. December futures up 0.3% at 15386, 112 points above spot, on moderate volume of 4,458 contracts.(STT)
1057 [Dow Jones] China shares mostly weaker on mild profit-taking; Shanghai B- share index down 0.15%, while its Shenzhen counterpart down 0.08%. Leading decliners include companies which had risen sharply in recent weeks on hopes of market reforms; analysts now don't expect any new reforms soon.(SMG)
1052 [Dow Jones] Cheung Kong (0001) down 1.8% at $97 on volume worth $481.3 million, topping most heavily traded stocks' list. Stock falling after MSCI didn't announce changes to constituents yesterday; stock had risen 12% last week on expectations MSCI would include Cheung Kong in its widely tracked index on Sunday. Trader at Salomon Smith Barney says selling just knee-jerk reaction; notes undemanding valuation (stock trading at 14% discount to NAV at $112.80), and likely U.S. interest rate cut soon factors limiting significant downside.(STT)
1043 [Dow Jones] Johnson Electric (0179) suffers from investors switching to more interest rate-sensitive sectors such as property; stock now down 2.7% at $12.65. Despite recent correction, Johnson had gained 4.2% YTD by last Friday's close vs HSI's 10% fall; investors expect Johnson to underperform in short term as rate-easing cycle underway.(IVW)
1041 [Dow Jones] A foreign investment house plans to downgrade Asian banks from overweight to broadly neutral, and HSBC (0005) from buy to neutral, says sales manager at local brokerage. Analyst thinks banks have outperformed for 6-9 months on expectations U.S. interest rates would peak soon and also as safe haven for investors worried by tech stocks' fall; but as share prices already reflecting these positive factors, and U.S. economy likely to slow down, may be time to switch to other sectors.(IVW)
1038 [Dow Jones] HSI up 0.4% at 15247, lifted by Wall Street's gains last Friday as well as view U.S. markets close to bottom while earnings warnings already factored in. Some buying in heavyweights Hang Seng Bank (0011), Hutchison (0013) and China Mobile (0941), after recently being sold short by investors on expectations their MSCI weightings will be cut, also supporting HSI's rise. Traders say investors cheering MSCI's decision to implement free-float system in phases, minimizing market disruption; news prompting shorters to cover their shorted positions. Traders say 15400 short-term psychological resistance level for HSI still intact.(STT)
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