StockHouse @ The Bell : January 19, 2001
Today in the Markets
Telecoms Lead The Way
The Hang Seng Index closed Friday almost touching the 16,000 mark on robust gains from telecom plays which picked on the back of NASDAQ's overnight rally and market-calming earnings in the tech sector.
The Hang Seng Index finished Friday up 404 points or 2.8 percent 2.6 percent to 15,933 on a healthy turnover of $14.7b, up from Thursday's $9.2b. Funds are believed to have swum back for a rally ahead of the Chinese Lunar New Year next week.
On Thursday, the tech-laden NASDAQ soared 3.19 percent to a five-week high, while the Dow added 0.89 percent. Microsoft's [MSFT] release of its quarterly results meeting market expectation after the closing bell also soothed investors' worries for a while.
Pacific Century CyberWorks [8] surged 8.8 percent to $4.63 as some found the stock attractive on its strong enterprise value per subscriber base. Rumours that PCCW might eventually find a buyer for the shares to be offloaded by Cable & Wireless [L.CW] when the lock-up period expires also helped the stock.
"Richard Li's (PCCW's Chairman) dinner show-up with his father (tycoon Li Ka Shing) last night also added a boost", heightening speculation that the younger Mr. Li may seek help," said Josephine Hui, Director of Celestial Asia Securities.
"On the other hand, some funds snapped up PCCW shares betting that the Company may finally find a buyer," she said
Smartone [315] shot up 10.5 percent to $13.70 on news that it was raising tariffs by $20 a month for its cellular service and is expected to bring in about $100m in additional revenue. Its smaller peer Sunday Telecom [866] also rose 11.3 percent to $0.68 on the bullish sentiment.
Most actively traded Hutchison Whampoa [13] climbed 5.1 percent to $104.00 on a turnover of $1.9b. It was followed by China Mobile's [941] 4.2 percent gain to $49.40. China Unicom [762] also put on 4.7 percent to $13.25 as the second largest Chinese mobile carrier said Thursday that the number of mobile phone subscribers jumped more than 300 percent in 2000, compared with 1999.
Red chips and GEMs were also the day's outperformers. Legend [992] bolstered the red-chip sub-index to rally 3.3 percent to 1,178 as it was bullish on NASDAQ's strength. China's largest computer maker leapt 12.3 percent to $6.85. Also on the mainboard, First Pacific [142] rebounded 10.1 percent to $2.03 on a sharp rebound of Philippine peso. The stock recovered most of yesterday's 11.3-percent loss.
Big caps on the GEM board including Tom.com [8001] and SUNeVISION [8008] pushed the second board up 6.1 percent to 310 in line with gains in the broader tech counters. The former rocketed 23.5 percent to $2.50 on heavy trade, while the latter jumped 20.4 percent to $2.95. Other tech issues such as Computer & Tech [46] and QPL [243] posted gains of 16.9 percent to $4.33 and 10.3 percent to $5.35, respectively.
In the property sector, selective plays continued to edge higher on expectation of an interest rate cut by the end of this month. Hysan Development [14] rose 4.2 percent to its 52-week high of $13.55. Sun Hung Kai Properties [16] and Swire Pacific [19] advanced 4.3 percent to $84.00 and 9.6 percent to $57.25, respectively.
Market Preview
There will only be one and a half trading days next week due to the Chinese Lunar New Year holidays. Traders believe the market has already enjoyed a pre-Chinese New Year rally as the Hang Seng Index has gained 5.6 percent in the past few weeks. Investors are expected to be quiet ahead of the five-day long weekend.
"The Index may touch 16,000 as trading will be light and gains can be easily manipulated by short-term speculative buying driven by the futures," says Celestial Securities' Ms Hui.
"The results released out of the US met market expectations because the expectations had all been lowered in reaction to some previous profit warnings. Whether gains in the NASDAQ can be sustained or not remains to be seen as people doubt if the US tech companies can recover so fast just right after the bubble burst," she added.
Ms Hui sees the local market to consolidate after January as the market has already factored in most positive news.
STOCK WATCH
HOT STOCK
Beijing Datang [991] may rise as UBS Warburg raises its target price on the power generator from $2.40 to $2.60 in light of upcoming acquisition and merging activities.
COLD STOCK
Great Wall Technology [74] may drew pressure after Solomon Smith Barney rated the stock as "underperform" due to unsatisfactory sales.
StockHouse Financial News
Pro Picks: Core Pacific Yamaichi's Nestor Lai Picks Three Property Outperformers
By Agnes Tsang
It is not news that Hong Kong's property sector has been undergoing a structural change over the past few years. But uncertainty regarding where property shares are headed continues to persist. Core Pacific Yamaichi's property analyst Nestor Lai, believes the performance of the sector this year will be improved but a lot will continue to depend of the SAR Government's policies. For now, Core Pacific predicts a moderate 3.9 percent increase in property prices for 2001.
Full Story
CITIC Ka Wah Bank: Improving Asset Quality
By Grace Lee
CITIC Ka Wah Bank [183] has successfully recovered $4.5b of $6.9b in bad loans to China over the past two and a half years. Management has revealed that this figure was further reduced to $1.9b after it recovered an additional $500m in overdue loans during the second half of 2000. With its asset quality improving and banking operations growing smoothly, CITIC Ka Wah Bank is expected to report strong full-year results.
Full Story
IPO Watch: Convenience Retail Asia: Back To Basics For The GEM
By Maryanne Truong
Finally comes a potentially interesting and profitable GEM issue. Convenience Retail Asia [8052] is a convenience store retailer operating under the Circle K brandname. Its old economy status is one appealing aspect. Its potential as a China consumption play is another. This IPO could herald a change of fortune for the beleaguered GEM board.
Full Story
China Overseas Land: Loading Up On The Motherland
By Alice Poon
Amidst stubborn weakness in the local residential market, China Overseas Land [688], together with parent China Overseas Holdings, has been quietly amassing land in a number of major mainland cities over the past year while continuing to remain on the sidelines of the local land auction scene.
Full Story
View From the US: JDS Uniphase May Rally 26%, Then Higher Still
By Yola Edwards
A recent StockHouse article correctly predicted JDS Uniphase's [JDSU] [T.JDU] 27% advance and subsequent decline in December. Having completed the four stages of a trading cycle, and a bearish "M" formation, it appears that the stock has been in a contracted Stage I, or basing formation, over the past month. It now may be ready to enter the more dynamic Stage II, or acceleration stage. Currently, shares of the optical networking giant are temporarily overbought at US$50. A quick decline to approximately $46 may set the stage for a retracement back up to possibly challenge year-2000 highs.
Full Story
News in Brief: Editor's Selection
Travelsky Profit Rose 21% In 2000, Listing Documents Say
Travelsky Technology Ltd., China's state-owned airline booking system, estimates profit rose by a fifth last year, listing documents presented to investors ahead of its initial share sale in Hong Kong next month show.
Full Story
Tom.com Pares Loss To $10 Million In Fourth Quarter
Tom.com [8001], an entertainment Web site controlled by billionaire Li Ka-shing, pared losses to HK$78.3 million in the fourth quarter of 2000, reflecting increased revenue from non-Internet businesses.
Full Story
SmarTech Defends $140 Million Sky deal
Industrial mould-maker SmarTech Digital Manufacturing [8068] has attempted to justify the company's decision to buy a start-up Internet data centre operator for HK$140 million.
Full Story
Sunevision Online Gaming Partnership Eyes China
Sunevision Holdings [8008] has formed a strategic partnership with Skynet Holdings [577] and Tokyo-based Pine Com International to establish an online gaming platform in March.
Full Story
GEM
Convenience Retail Asia Shares Rise On Hong Kong GEM Debut
Convenience Retail Asia [8052], which has the Hong Kong and south China franchise for Tosco Corp.'s Circle K shops, rose as much as 7.8 percent to HK$1.24 on its first trading day on the GEM.
Full Story
GEM Still Dazzles Start-Ups
The GEM is unlikely to see a strong turnaround in the short term now that the euphoria over dotcom companies has evaporated, analysts said yesterday.
Full Story
IPO Report
KCRC Listing On Back Burner
The Kowloon-Canton Railway Corp (KCRC) is unlikely to be listed before 2006, according to chairman and chief executive Yeung Kai-yin.
Full Story
Internet Report
Service Cuts Cost Of Cash Transfers
A new Internet money-transfer service will enable banks to reduce costs and attract potential customers, according to British Web payment systems provider earthport.
Full Story
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