HSI Down in Mid-Morning; PCCW Loses 4.9% (Update1)
Jan 17, 2001 - 11:51:51 HKT
Quamnet News Service
Hong Kong stocks lost ground in mid morning trading as investors began to lose interest in the approach ahead of the three-day Chinese New Year holiday starting from next Wednesday, analysts said.
China Mobile (H.K.) Ltd. (0941) and property plays led the declines. Pacific Century CyberWorks (0008) fell to its 52-week low for a fifth trading day, dampened by a possible share sale by its second-largest shareholder, U.K.'s Cable & Wireless Plc, and the rising interest margins for its refinancing loans.
At 11:23 a.m. Hong Kong time, the benchmark Hang Seng Index was down 139.43 points, or 0.91 percent, at 15,223.60. Turnover was HK$3.4 billion. The Growth Enterprise Market Index, which tracks the performance of technology and related companies on Hong Kong's second board, shed 3.06 points, or 1.04 percent, to a record low of 290.03. Turnover was HK$29 million.
China Mobile, China's largest mobile phone company, fell 1.3 percent to HK$46.30 on profit taking, after gaining 1 percent yesterday, traders said.
China Unicom (0762), which owns China's No. 2 mobile phone service, rose 0.9 percent to HK$11.45. Unicom reportedly is considering selling a minority stake to one of several foreign companies including NTT DoCoMo Inc., Deutsche Telekom AG, AT&T Wireless Group and France Telecom SA, but it hasn't started formal negotiations with the companies.
Pacific Century CyberWorks (0008), a major Asian communications company, fell for a fifth day to an all-time low of HK$3.90, down 4.9 percent from yesterday. Investors are concerned that Britain's Cable & Wireless may dump PCCW shares again after its lock-up period expires in mid-February. The British phone company, which holds about 15 percent of PCCW, can start selling a 4 percent stake after Feb. 17, 2001, and the rest of the stake after Aug. 17. It already sold a 4.9 percent stake in PCCW through a placement in September last year.
Meantime, PCCW will sign its loan agreements -- the US$4.7 billion refinancing loan and the US$1.5 billion loan for its Internet Protocol Backbone joint venture with Telstra Corp. -- with banks this week, said Rebecca Leung, its executive vice president. Most of the US$4.7 billion loan will be used to refinance its bridging loan used to take over HKT, she said.
Property stocks fell most sharply among all sectors on concerns that there will still be an oversupply in the residential market which will drag down property prices.
Swire Pacific Ltd. (0019) fell 0.9 percent to HK$52. The company said it will take a charge of HK$151 million plus interest on its Horizon Gardens development against its consolidated profit and loss statement for 2000 following its loss of a long-running arbitration proceeding with the Hong Kong government over land fees. Meantime, the amount it must pay on the office towers in Taikoo Shing has still to be determined. It said the amount -- to be decided by negotiation or, failing that, assessed by independent experts -- will be offset against the company's consolidated property valuation reserve, not against the profit and loss account. At the end of 1999, the property valuation reserve had a surplus of HK$30.76 billion. The estimate of the government's maximum claim, including interest, was about HK$4.5 billion, it said.
Cheung Kong Holdings Ltd. (0001), the city's largest developer by market value, fell 0.5 percent to HK$102.50. Sun Hung Kai Properties (0016), the second largest developer, fell 0.6 percent to HK$78.
Hutchison Whampoa Ltd. (0013), Hong Kong's largest conglomerate which also invests heavily in the telecoms industry, dropped 0.8 percent to HK$97. Hutchison reportedly may team up with NTT DoCoMo to bid for the mobile business of Cable & Wireless Optus Ltd., Australia's second-biggest phone company. The sale price of Optus has been estimated at A$17 billion.
Red chips and H shares mostly plunged further on reports that the China Securities Regulatory Commission will crack down on stock price manipulation and other problems in the mainland markets.
China Everbright Ltd. (0165), the Hong Kong-unit of China Everbright Group, tumbled 8.8 percent to HK$7.80, extending a 7-percent fall yesterday. China Resources Enterprise Ltd. (0291) dropped 5.3 percent to HK$10.75 after yesterday's 5-percent decline. COSCO Pacific Ltd. (1199), which administers the Chinese government's shipping business, lost 4.2 percent to HK$5.70.
Rate-sensitive bank stocks were mixed on worries that the Fed may slow the pace for further interest rate cuts.
HSBC Holdings (0005), Europe's and Hong Kong's largest bank, were unchanged at HK$114. HSBC topped a list of arrangers of Hong Kong syndicated loans in 2000, arranging US$2.8 billion worth of local syndicated loans last year, said Thomson Financial, which tracks the loans market.
Hang Seng Bank (0011), a subsidiary of HSBC, was also unchanged at HK$100.50. Dao Heng Bank (0223) was down 1.4 percent at HK$42.80. Bank of East Asia (0023), the city's third-largest publicly traded bank by market value, rose 1.7 percent to HK$21.20.
Mass Transit Railway Corp. (0066), Hong Kong's subway operator, fell 1 percent to HK$13.65. Hong Kong Exchanges and Clearing Ltd. (0388), the city's sole marketplace for stocks and futures, was down 0.6 percent at HK$17.80.
The GEM Index hit its record low for a third day as Phoenix Satellite Television Holdings Ltd. (8002) fell another 4.2 percent to HK$1.85 after losing 2.5 percent yesterday. The stock recorded a turnover of HK$10.6 million, more than a third of the GEM's total turnover.
SUNeVision Holdings Ltd. (8008), the Internet arm of Sun Hung Kai Properties Ltd. (0016), dropped 2 percent to HK$2.40, its record low. tom.com Ltd. (8001), a China portal controlled by billionaire Li Ka-shing, was unchanged at HK$1.90, near its record low of HK$1.85.
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