MARKET TALK-HK: PC & Chip Stocks Expected To Gain
0954 [Dow Jones] PC maker Legend (0992) and semicon related ASM Pacific (0522) and QPL (0243) may be lifted on opening buy orders, thanks to strong gains Friday in Dell, Intel and Applied Materials, says sales trader with European brokerage; but cautions against chasing them if they rise too much; Legend closed at $5.75, ASM at $11.90, QPL at $4.75 Friday.(IVW)
0950 [Dow Jones] Mainland fixed line operator China Telecom hasn't confirmed any IPO plan, Sing Tao Daily reports quoting company spokesman; rumor last week said China Telecom would list next year. Although management interested in listing, spokesman stresses ultimate decision will be made by State Council, its owner; says group hasn't submitted any listing plan to Council; adds China Telecom currently undertaking many loss-making operations as state-owned enterprise and listing depends on when such duties resolved, hence may require much time.(IVW)
0949 [Dow Jones] HK trader expects 1-year HKD forwards to hold steady around current discount of 155-145 to spot rate - stable from late Friday - as players hesitant to open fresh positions ahead of year-end.(EAR/MEW)
0947 [Dow Jones] USD/HKD expected to trade as low as 7.7960 today, vs 7.7973 late Friday and 7.7970 now; tight banking liquidity resulting from outflow last Friday leading companies to scramble for Hong Kong dollars to cover year-end positions, says HK trader.(MEW)
0944 [Dow Jones] MSCI's announcement yesterday to have key indices based on free-float system by 2002 would give investors ample time to adjust portfolio and minimize market disruption, says Philip Mok, research head at SG securities; says adjustment expected after MSCI published consultation paper in September. Trader at European brokerage believes although HSI's total market representation will be slashed from 60% now to only 39% of total market cap under new free-float system, any selling will occur over long adjustment period.(STT)
0941 [Dow Jones] Hang Seng Bank (0011), China Mobile (0941), and Hutchison Whampoa (0013), shorted recently by relative value traders speculating on MSCI to quickly introduce new methodology to reduce weightings on these counters, may be lifted by some short covering. MSCI confirmed yesterday free-float ratio, or investibility, will figure more prominently in index structuring, but new scheme to be introduced only gradually, with full implementation in 2002.(IVW)
0936 [Dow Jones] U.S. stock futures up sharply in Asia screen trade after advantage swung back to Bush over weekend with U.S. Supreme Court decision temporarily halting Florida recount that Gore needs; follows earlier ruling by Florida Supreme Court allowing manual recounts. Nasdaq March 100 futures up around 3.4% while S&P 500 futures up 2.1%. While outlook for tech stocks in particular not assured, investors now seem to be viewing bad news about 4Q profit prospects as factored in.(RXM)
0934 [Dow Jones] Overnight Hibor expected to remain firm around 8% today due to tight liquidity after banking system outflow Friday, says local bank trader; but adds long-term Hibor should trade at discount to USD Libor as HK market expects U.S. rate cuts in coming months after Greenspan hints last week.(MEW)
0933 [Dow Jones] MSCI's confirmation it's changing weighting methodology, effective only in late 2001, likely to have little impact on HSI; but some stocks, such as Hang Seng Bank (0011), China Mobile (0941), which were expected to suffer under new scheme and thus shorted in past few days may rise on some short covering. Property counters may gain further on decent sale of new flats over weekend. Strong psychological resistance for HSI expected at 16100, 250-day moving average; index breached 50-day moving average last Friday.(IVW)
0924 [Dow Jones] Wall Street's gains last Friday likely to lift HSI by about 100-200 points today, says Alex Wong, research manager at OSK Securities; predicts 15400 will be short-term psychological resistance. Philip Mok, research head at SG securities, agrees market likely to move higher, noting investors factoring in U.S. earning warnings and expectations of imminent U.S. interest rate cut catalysts which will stabilize HSI in short-term. HSI closed down 0.6% at 15011 last Friday.(STT)
0920 [Dow Jones] Celestial Asia Securities' (1049) top-up placement to raise net proceeds of about $143.2 million by selling 479 million existing shares at 30 cents each, or 10.4% discount to last traded price, to 19 investors, likely to pressure stock when trade resumes today. However traders say as placement size not huge, selling pressure should be short-lived; shares to be issued represent about 8.8% of CASH's existing and 8.09% of enlarged issue share capital. Stock closed at 33.5 cents last Thursday before suspension Friday.(STT)
0916 [Dow Jones] Sino Golf's placement tranche of 67.5 million shares 5-6X oversubscribed, newspaper reports quote chairman as saying. Public tranche of IPO opens today, offering 7.5 million shares at $1.10-1.30 each; price determined on Dec 14. Relatively good response in placement may help set offer price close to upper limit of $1.30.(IVW)
0907 [Dow Jones] Overnight Hibor now quoted at 7.75%, after opening 7.50%, touch lower vs 8.0% previous close; but HK trader says Hibor will remain at premium to USD Libor while HKMA's aggregate balance stays in deficit; "But I think there is enough liquidity in the market so the short squeeze will not last for too long."(EAR)
0900 [Dow Jones] HK trader notes continued HKD-buying interest in HK money market, likely due to significant Hibor premium over USD Libor; USD/HKD quoted 7.7970 early vs 7.7973 Friday close, and likely to weaken further.(EAR)
0853 [Dow Jones] Pacific Century CyberWorks' (0008) plan to cash in $160 million from spinning off its 80%-owned data center subsidiary iLink.net on GEM board, according to unsourced Oriental Daily report, unlikely to boost shares as listing plan widely anticipated. Report says iLink will issue 10% of existing share capital and raise $200-$400 million, valuing unit at about $2-$4 billion. Company officials couldn't be reached for comments. PCCW shares surged 8.3% to close at $5.85 Friday.(STT)
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