MARKET TALK-HK: Portals May Be Hit By Yahoo Warning
Thursday, January 11 9:43 AM SGT
0943 [Dow Jones] General purpose portals such as Tom.com (8001), Sunevision (8008) and Hongkong.com (8006) may suffer from Yahoo's revenue warning. Traders think Yahoo's troubles highlight uncertainty in relying on advertising-based revenue; however as these portals have already been badly hit since late December, reaction to Yahoo's announcement may be limited. Tom.com closed at $1.94, Sunevision at $2.825 and Hongkong.com at 39.5 cents yesterday.(IVW)
0933 [Dow Jones] HKD forwards down slightly as gap between USD Libor and Hibor rates widens, says HK trader; USD Libor up while Hibor rates mostly steady. 1-year HKD forward now at discount of 150-145 to spot, vs 143-138 late yesterday.(EAR)
0932 [Dow Jones] HSI may open up 0.5-1% on overnight gains in U.S. equities. TMT stocks likely boosted by Nasdaq's 3.4% rise; Motorola's poor results not expected to cause concerns as Nokia had forewarned slowdown in industry on Tuesday. Second-line property stocks may stabilize after selloff yesterday on placement fears but strong rebound unlikely; investors expected to seek security in better-funded SHK Properties (0016) and Cheung Kong (0001). HSI's psychological resistance lies around 15800-15600.(IVW)
0928 [Dow Jones] Taiwan shares up after Nasdaq's 3.4% rise overnight and lack of negative news domestically. "We haven't hit our 'satisfaction level' yet - which is around 5800-6000," says Frank Lin, chief dealer at Daiwa in Taipei. Further gains - after 15% rally in past 2 weeks - expected; index now up 0.5% at 5462.45.(JWU)
0926 [Dow Jones] STOCK CALL: Sino Land's (0083) placement of 170 million shares, raising about $740 million before expenses will help reduce group's gearing to below 20%, says Merrill Lynch; debt/equity ratio now 23%. Also says placement will dilute EPS by about 5% in FY00 and FY01. Adds while fund raising exercise will strengthen company's balance sheet, sentiment on stock will remain negative in near future. Reiterates neutral recommendation. Stock plunged 12.1% to $4.175 yesterday.(SMG)
0916 [Dow Jones] Buyers of Sogo's $3.53 billion Causeway Bay building, Chow Tai Fook and Chinese Estates' (0127) Lau brothers, seeking 6-year, $2 billion syndicated loan, says Apple Daily quoting unnamed banking sources; expects Bank of East Asia (0023) and/or some mainland funded banks to be arrangers, with interest rate at 175-200 bps above Hibor and loan collateralized by site. Banks' response to loan may reflect their view on prospects for both commercial property and retail property markets.(IVW)
0912 [Dow Jones] Another sign China's Internet industry undergoing consolidation phase amid intense competition. Ming Pao report quotes source close to Lycos Asia as saying U.S.-based Internet firm has acquired China-based Internet concern Myrice.com to strengthen Chinese Internet operations. Report also says acquisition price about US$12.75 million. News not surprising after one of China's largest portals Sohu unveiled plan one month ago to reduce staff in bid to cut costs amid deteriorating operating environment; not expected to impact HK tech shares given industry shake-up long expected.(STT)
0907 [Dow Jones] Wall Street traders optimistic on Nasdaq fortunes this year, with Security Traders Association poll showing 51.6% surveyed expect 2001 finish within 3000-4000 range. Fed rate action expected to drive stock movement, and though huge 1H headway unlikely, a combination of lower taxes and rate easings "could give us a fairly decent market later on in the year," says STA president Lee Korins.(WJK)
0905 [Dow Jones] Zhejiang Expressway (0576) applies to raise CNY1 billion through A-share issue and placement in Shanghai. Proceeds will finance purchase of 18.4% stake in Zhejiang Shangsan Expressway and to expand Hangzhou-Ningbo Expressway. Price to be determined after book-building exercise, based on demand. Follows recent spate of A-share offers by H-share companies eager to tap demand in strong Chinese markets. May put pressure on shares as new fund-raising exercises tend to spark concern in local market.(KIR)
0857 [Dow Jones] USD/HKD touch lower at 7.7998 vs 7.7999 late yesterday, and HK trader says fears of HKD outflow from banking system aren't realistic; while arbitrage USD-buying occurring, amount of funds involved not large.(EAR)
0856 [Dow Jones] China 2000 trade data underscores need for Beijing to find other growth drivers this year. Exports jumped 27.8% but faster-growing imports narrowed trade surplus 17% from 1999 to $24.1 billion. Export growth well off June high of 45% on-year and likely to lose more steam; Merrill Lynch economist Guonan Ma predicts slowing to 8% in 2001 "under the weight of slowing global demand, weakening regional currencies, and possibly diminished tax incentive for exports."(JRD)
0855 [Dow Jones] Macquarie yesterday issued 6-month European call warrant on China Everbright Ltd (0165). Strike price set at $8.05, or 90% of stock's closing price yesterday; warrant (10-for-1) priced at 25.1 cents, hence gearing of 3.57X. Another opportunistic issue to take advantage of enthusiasm in China related stocks, say traders.(IVW)
0852 [Dow Jones] Despite rosy FY00 earnings forecast by some analysts, China's third largest oil company CNOOC's imminent IPO unlikely to receive strong interest, says equity salesperson at European investment bank; notes its upstream-focused operations likely plagued by expected fall in oil prices. According to various brokerages, FY01 net profit expected to fall about 30% on-year after more than doubling in FY00 as oil prices ease. CNOOC will be dual listed in HK and New York in February.(STT)
0846 [Dow Jones] Short-selling turnover down 31.2% at $207 million yesterday; number of stocks shorted unchanged at 34. Telcos most active; China Mobile (0941) with $42.9 million worth of shares shorted, Pacific Century CyberWorks (0008) with $25.1 million and Hutchison Whampoa (0013) with $20.3 million.(IVW)
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