MARKET TALK-HK: Report Suggests PC Insur CEO May Leave
1330 [Dow Jones] QuamResearch notes Pacific Century Insurance (0065) deputy chairman and CEO and Pacific Century Regional Development director Andrew Yang Fan Shing has sold all his shares in PCRD and Pacific Century CyberWorks (0008); report says this may spell trouble for PC Insurance as share sales could indicate Yang on his way out. There had been market speculation previously PCRD may sell off PC Insurance to pay part of PCCW's liabilities. PC Insurance shares down 2.6% at $2.78 midday; PCCW down 2.6% at $4.75.(GEY)
1316 [Dow Jones] Short-selling volume totals $54.2 million by midday, down 70% from last Monday morning. Activity very light; Hutchison Whampoa (0013), with short-selling volume worth $20.8 million, already leader. Most actively traded HSBC (0005) records no short selling while its shares climb to another historical high.(IVW)
1300 [Dow Jones] HSI ends morning down 0.2% at 16015 as HSBC-led (0005) rally peters out. Index dragged down by weakness in telcos and property developers; Pacific Century CyberWorks (0008) down 2.6% at $4.75, SHK Properties (0016) down 2.7% at $80.25. SmarTone (0315) down 11% at $11.70 as stock plagued by worries about OFTA planning to charge for 2G license renewal. Apart from HSBC, media-related Wharf (0004) and TVB (0511) among few gainers. If HSI can't hold above 16000, psychological support at 15500.(IVW)
1245 [Dow Jones] Only 107 residential units at various projects sold over Chinese New Year holidays, underlining lackluster primary market, says salesperson at Salomon Smith Barney. Likely U.S. rate cut this week will reduce selling pressure on shares as market continues to seek balance between sluggish property transactions and expensive valuations. Says both Sun Hung Kai Properties (0016) and Henderson Land (0012) trading at premium to NAVs at $73.57 and $40.29 respectively; likely to fall as they've significantly outperformed peers with mostly double-digit discount to NAVs. Henderson Land down 0.7% at $40.70; Sun Hung Kai down 3% at $80.25.(STT)
1231 [Dow Jones] Leading Internet portals falling as investors dump shares after hefty gains just before holidays; Tom.com (8001) down 6.8% at $2.725, SUNevision (8008) down 8.2% at $3.10. Not supported by earnings growth, Core Pacific-Yamaichi urges investors to sell these stocks after their recent strength and switch to China tech plays Founder (0418), Stone (0409), and Legend (0992). (IVW)
1223 [Dow Jones] As market appears to be settling in tight range and not expected to experience sharp movements in short term, both HSI and stock options market rather quiet; derivative traders say existing overall positions for various derivative trading desks biased in short volatility, but as total size not big and traders rather confident Fed unlikely to spring surprises again, they're therefore comfortable to leave positions open to earn more time decay and not having to cover them as yet.(IVW)
1220 [Dow Jones] After rising earlier on gains by HSBC (0005), still up 2.5% at $121.50, HSI now down 0.2% at 16010, as Hutchison Whampoa (0013) and Pacific Century CyberWorks (0008) both tumble about 2.5% on profit-taking after gaining sharply before Lunar New Year holidays. HSI testing 16000 support; Core Pacific-Yamaichi says next psychological support at 15500.(IVW)
1205 [Dow Jones] Boosted by short-covering orders, turnover in HSBC (0005) surges to $787.9 million, topping most actively traded issue list followed by Hutchison (0013) with volume worth $380.8 million. HSBC shares range bound, now up 2.5% at $121.50, after closing at record high of $122 in London on Friday amid expectations Bank of England will cut rate when it meets on Feb 7-8. Buying today through Merrill Lynch, Kleinwort Benson Securities and HSBC Securities.(STT)
1159 [Dow Jones] STOCK CALL: Salomon Smith Barney raises Midland Realty's (1200) FY00 and FY01 earnings forecasts to reflect rise in market share and sharp fall in expenses recently. Says sale and purchase transaction volume may recover in 2001 due to economic recovery and improved affordability of residential properties but supply glut should hinder an increase in transaction value. Retains neutral rating. Shares down 1.6% at 63 cents on turnover worth only $299,600.(STT)
1142 [Dow Jones] East Asia Financial, wholly owned unit of Bank of East Asia (0023), will issue US$550 million, 7.5% subordinated notes. East Financial will lend sum to BEA to refinance its US$300 million subordinated floating-rate notes and for working capital. BEA shares up 1.7% at $21.50 as analysts expect bank to post strong earnings in FY01 as interest rates fall and absorption of FPB Bank (0717) is completed.(IVW)
1133 [Dow Jones] Turnover in TVB (0511) swells to $123 million mainly due to special transactions of about 2 million shares at 44.103/share and 500,231 shares at $44.104/share. Both transactions make up 90% of total volume so far. However total turnover represents only 0.01% of existing share capital; unlikely to impact shares; now up 1.1% at $44.70.(STT)
1126 [Dow Jones] Expectations of aggressive U.S. rate cut preventing investors from making outright short positions in Hang Seng February futures, says futures trader at European brokerage. Long positions opened so far also light, suggesting most traders taking wait-and-see stance before FOMC meeting Wednesday. Suggests taking long positions at 16080 and taking profit at 16250 and stop-loss selling if market falls below 15980; now up 0.5% at 16123 with 2,060 outright lots and 3,967 contracts for February futures.(STT)
1111 [Dow Jones] Goldman Sachs plans to issue 9-month European call warrant on HSBC (0005). Strike price to be set at 105% of stock's closing price today; warrant (10-for-1) to be priced at 1.19% of closing price. Implied volatility about 39%, rather expensive relative to peers; closest equivalent, MB-HSBC EC0106 (2186), at 76 cents vs HSBC shares at $121, has implied volatility of only 33%.(IVW)
1108 [Dow Jones] HK December export, import growth likely down amid weaker local demand and U.S. slowdown; export growth average forecast 5.4% vs 8.7% in November, import growth 7% vs 11.6%, according to Dow Jones survey of 6 economists. "China's exports already slowed markedly in December due to the U.S. slowdown, and we expect the same phenomenon to occur in other Asian countries, including Hong Kong," says Citibank senior economist Joe Lo. Data due at 1615.(MEW)
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