MARKET TALK-HK:Telstra Bid For M1 Stake Not Surprising
0900 [Dow Jones] Australian Financial Review report Pacific Century CyberWorks' (0008) partner Telstra may buy 15% stake in Singapore's MobileOne from U.K.'s Cable & Wireless not surprising, says Wallace Cheung at DBS Securities. Explains Telstra, as 60% majority shareholder in mobile JV with PCCW, will take decision-making role in ensuring additional 15% stake in M1, besides 15% stake now held by PCCW, injected into JV to boost its strength across Asia-Pacific region; injection will also raise JV's NAV before possible spinoff for listing. However, news unlikely to impact PCCW shares as there has been similar speculation in past. Stock closed down 3.1% at $4.675 yesterday.(STT)
0856 [Dow Jones] HK likely to gain most (vs regional countries) from U.S. rate cuts, says regional strategist Ajay Kapur at Morgan Stanley following changes to its Asia equity portfolio. Recommends selling bank shares across Asia but buying media, consumer and property stocks, particularly in HK. Downgrades Hang Seng Bank (0011) to neutral from outperform on high valuation; replaces it with Esprit Holdings (0330) and New World Development (0017) in model portfolio; says these 2 leveraged companies expected to show strong growth as rates fall.(STT)
0849 [Dow Jones] Chief Secretary Anson Chan has resigned her post and Financial Secretary Donald Tsang tipped to succeed her, say local newspapers quoting unnamed sources; Chan due to retire in 2002. Speculation of Chan's resignation might have contributed to fall in HK stocks yesterday afternoon; stocks may again react negatively today to sudden resignation but unlikely to have lasting impact if Tsang, Chan's understudy for years, takes over.(IVW)
0843 [Dow Jones] Telstra named as contender for Cable & Wireless Plc's 15% stake in Singapore's M1, Australian Financial Review reports, quoting sources; A$500 million stake viewed key to Telstra's Asia strategy. Earlier reports said France Telecom unit Orange in talks to buy C&W's M1 stake and 15% held by Telstra's JV partner PCCW (0008) via C&W HKT. Some analysts say PCCW likely keen to retain M1 stake, which it plans to inject into Telstra JV, so would make sense for Telstra to buy C&W Plc's stake. Telstra declines comment.(RXM)
0835 [Dow Jones] ABN Amro issued 8-month European call warrant on Hutchison Whampoa (0013) yesterday. Strike price set at $109.825; warrant (10-for-1) priced at $1.18. At 50% implied volatility, new issue cheaper than more actively traded LB-HWL EC0105 (2150) and SG-HWL EC0103 (0103), but at par with others. Given recent weakness in Hutchison, may not be attractive issue.(IVW)
0829 [Dow Jones] Pacific Century CyberWorks' (0008) deputy chairman Francis Yuen says company's US$1.5 billion IP Backbone loan with Australia's Telstra and US$4.7 billion syndication loan to refinance takeover of Cable & Wireless HKT will be completed by Feb 15. Finalization of loans expected to help stabilize flagging stock but impact unlikely great as long expected. Shares ended down 3.1% at $4.675, lowest close since merger with HKT.(STT)
0823 [Dow Jones] HK SHARES OVERNIGHT: Shares fell in London trading; U.K.-based HSI down 40 at 15050. HSBC (0005) continued to fall from recent highs, losing 88 cents to $114.12. In New York, ADRs mostly fell; China Mobile (0941) down 1.5% at US$28.63 (equivalent to $44.66); China Unicom (0762) down 2.5% at US$14.88 (equivalent to $11.61); HSBC flat at US$74.89 (equivalent to $116.82); Cheung Kong (0001) down 4.5% at US$12.75 (equivalent to $99.45); Hutchison (0013) down 0.4% at US$62 (equivalent to $96.72); Pacific Century CyberWorks (0008) flat at US$6.25 (equivalent to $4.87); Sinopec (0386) down 4.7% at US$15.06 (equivalent to $1.17).(SMG,IVW)
0816 [Dow Jones] Short-selling turnover down 17.4% at $243 million yesterday; number of stocks shorted rose to 36 from 34. Legend (0992) led with $39.5 million as China-related stock suffered deep pull back in afternoon following good recent gains. Pacific Century CyberWorks (0008) posted $32.2 million worth of short-selling while stock price reached post-merger low. Other active counters: SHK Properties (0016), Wharf (0004) and China Mobile (0941).(IVW)
0809 [Dow Jones] WALL STREET: Nasdaq staged broad 4.6% gain, first time it has risen for 3 straight sessions since Sept. 1 last year; uptick came despite relatively disappointing profit news from high-tech companies. Difference this time is while investors punished individual stocks like Yahoo! on earnings shortfalls, they left rest of sector alone, allowing chip and computer makers to rise. Again, DJIA couldn't match Nasdaq, up mere 0.05% as investors liquidated some holdings to switch to tech. Motorola added 4% on its 4Q results that met forecasts, with Nokia and Nortel also higher. A mixed tale after-hours: computer maker Gateway shed 8% after falling well below analyst expectations on 4Q results, while Hewlett-Packard lost 4.2% on 1Q earnings warning; but Ariba beat forecasts on 1Q results. (RXM)
0800 [Dow Jones] OUTLOOK: 1315 American Chamber of Commerce's new chairman to make inaugural luncheon speech;
1500 Hutchison (0013) media conference to launch online investment service Hutchison CSFBdirect.(STT)
[Questions and comments please to Stephanie Tam at (852) 2832-2346 or stephanie.tam@dowjones.com. Currency amounts are in Hong Kong dollars and time is local Hong Kong time.]
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