Thursday, January 18 11:54 AM SGT MARKET TALK-HK: Analysts Start Talking Up PCCW
1155 [Dow Jones] As Pacific Century CyberWorks (0008) shares wallow around $4, some analysts starting to talk stock up; they note good news, like falling interest rates, bounces off company, while bad news can hit stock for months after rest of market has digested it. "The fact is that this is not a dotCom company with no cash flow behind it," says Lehman Bros analyst Michael Leary; most analysts believe $7 or $8 is fair value for stock. Pacific Challenge Securities Alan Hutcheson however says one problem is merged entity of PCCW and HKT yet to present balance sheet or other documents that would help analysts clarify financial status.(RXM)
1142 [Dow Jones] China Unicom (0762) up 11% at $12.50, thanks to positive media coverage on company's robust growth in subscribers and forecast of lower capex per subscriber. Salomon Smith Barney analyst Rohit Sobti says 10% fall in capex per subscriber from current estimate of US$265 will lead to total savings of CNY10 billion over 3 years. Says 10% drop in equipment costs has already been factored in; maintains outperform rating.(STT)
1125 [Dow Jones] Analysts say Singapore banks unlikely to be interested in buying HK-based Jardine Fleming Bank, unit of recently merged JP Morgan Chase. One analyst notes JF Bank on block for two years even before parent Robert Fleming was acquired by Chase Manhattan Bank last year; adds JF is small boutique bank specializing in treasury, consumer finance and structured finance, unlikely to give Singapore banks kind of access they need to penetrate fiercely competitive HK banking market. Also, with concerns of possible earnings deterioration looming, Singapore banks likely to turn cautious on overseas acquisitions.(GEY)
1122 [Dow Jones] China B share indexes edge higher, tracking their A share counterparts; Shanghai B-share index up 1.2% while Shenzhen B-shares up 0.9%. Overall sentiment remains cautious after recent losses in both A- and B-share markets on recent crackdown on market manipulators; traders expect range-bound trading for remaining two sessions before Chinese New Year break. "Most B share investors are staying on the sidelines and waiting for a clearer trend to emerge after Chinese New Year," says Chen Xiaofeng, analyst at Guotai J&A Securities.(SMG)
1113 [Dow Jones] Investors still cautious about red-chip sector despite rebounding after 4.4% slump yesterday on concerns about Chinese government's crackdown on insider trading; subindex up 2% at 1122 with yesterday's biggest loser China Everbright (0165) up 4.1% at $7.60 after 15% fall yesterday. Salesperson at BNP Paribas Peregrine says China Everbright's rise not sustainable amid likely drop in mainland brokerage unit's earnings due to crackdown.(STT)
1106 [Dow Jones] China Resources (0291) not likely to sell its 35% stake in HKCB Bank (0655) soon, although it doesn't fit well with group's new focus on trading and distribution, analysts say. "The problem is that they acquired it at a much higher valuation, and I don't think they want to book an exceptional loss," says Peter Pak at Tai Fook Securities; adds "unless somebody wants to pay a high premium it won't happen in near-term." HKCB shares now up 1.9% at $2.725 while CRE paid $4.50 in 1997. Still, ongoing consolidation in HK banking sector may drum up price as mid-size banks try to raise their market presence.(ASJ)
1105 [Dow Jones] Chinese portal Sina.com's grim outlook likely to further damp investor sentiment for Internet; executives predict 10%-20% revenue drop in current quarter from online ad spending weakness and seasonal slowdown. Revenue grew 7% sequentially last quarter and execs predict slight recovery later this year, but CSFB analyst Matt Adams says Sina's guidance is "a cause for concern, both for them and for the sector."(JRD)
1100 [Dow Jones] Traders note retail selling main reason for Pacific Century CyberWorks' (0008) tumble over past few sessions, suggesting many shareholders have lost confidence in PCCW amid flagging share price. Equity salesperson at European brokerage says low short-selling turnover in PCCW recently indicates institutional selling scant as most have already built outright positions earlier. Short-selling in PCCW over past week also thin with only 4 million shares shorted daily on average vs 10 million shares daily in August and September when shares hit by C&W PLC's first disposal of its PCCW stake. Stock now up 3.2% at $4 on thin turnover worth $76.4 million.(STT)
1055 [Dow Jones] NEW LISTING: Convenience Retail (8052) up 3.5% at $1.19 on strong volume worth $19.91 million; active bidding through underwriter BNP Paribas Peregrine; stock earlier touched high of $1.24 but failed to sustain at that level. Analyst at European brokerage favors issue on China concept. Convenience Retail plans to use most of proceeds to fund expansion on mainland; competition keen in HK as most of market share captured by rival 7-Eleven.(SKO)
1045 [Dow Jones] STOCK CALL: Analysts upbeat about prospects for China Resources Enterprise (0291) as its restructuring efforts progress, putting focus on trading and distribution. Say future upside depends not just on more NAV-adding injections but on how company transforms into operation with clear business focus; so it should be valued based on earnings than on its assets. "Two to three years down the road, it will become a solely value-based company," says Winnie Mak, analyst at BNP Prime Peregrine. Analysts say restructuring could boost share price by 20-25% above their current NAV estimates (of $10.07-$12.90) in coming year; so not surprising they mostly have outperform call on stock. Shares now up 2.9% at $10.70.(SMG)
1031 [Dow Jones] Pacific Century CyberWorks (0008) rebounds 3.9% to $4.025 after falling 20% over past week on concerns about C&W PLC's forthcoming placement of half its 15.3% stake in PCCW when share lock-up period expires on Feb 17. However rebound only dead-cat bounce and not genuine buying, says trader at European brokerage; cites ING Baring report which says shares expected to fall to $3.60-$3.80 in short-term, on C&W's pending block sale.(STT)
1017 [Dow Jones] HSI up 0.6% at 15346 after Nasdaq's rise overnight. Gains across the board with bank subindex outperforming due to HSBC (0005) following its slightly higher close in London overnight but buying in other bank issues scant; banking subindex up 1.1% at 23865; HSBC up 1.3% at $115. Yesterday's badly bruised red-chip sector rebounds; index now up 1.9% at 1120; but buying still thin and cautious as investors fear Beijing government's crackdown call may further spark selling. Traders expect HSI to move sideways at 15200-15500.(STT)
asia.biz.yahoo.com |
