Tuesday, January 30 3:49 PM SGT MARKET TALK-HK: PCCW To Test $4
1549 [Dow Jones] TECHNICAL ANALYSIS: PCCW down 5.8% at $4.50, unable to stay above $4.725 support, which is now turning into even tougher resistance. New falling tunnel has been forming since early December, notes Dow Jones analyst John Wu, with bottom support at around $3.50. Bollinger Band suggests PCCW will test its lower band at $4 before falling any further. Converging Bollinger Band indicates share price will become volatile soon, perhaps by end of this week.(JZW)
1541 [Dow Jones] HK money market already pricing in 50-bp Fed rate cut; reflected in lower 2- and 3-month Hibors, says HK trader. Says if rate cut only 25 bps, these Hibor rates may rise by 25 bps. 3-month Hibor 5.31% vs 5.44% late yesterday.(EAR)
1532 [Dow Jones] SmarTone (0315) will pay estimated US$340 million for 3G license in HK if it's succesful in getting one; estimate includes 3G service premium if it wants to renew existing licenses and use old network to provide 3G services, predicts analyst at European brokerage; says recent share slump on 3G service premium concern overdone as government still needs to finalize conditions for license issue and guidelines for auction in February. Stock now rebounding, up 1.3% at $12, after falling 16% over past two days.(STT)
1530 [Dow Jones] February HSI futures down 0.4% at 16090 in very quiet trading, just under 10,000 contracts traded of which about 2,000 roll-over related. Broker says although traders not building up large outright short positions, hedge-related selling has driven premium over cash to about 50-60 points, slightly lower than fair basis of about 70 points premium.(IVW)
1525 [Dow Jones] Investors cautiously reducing exposure to rate-sensitive property and banking stocks as rate cut of up to 50 bps after FOMC meeting largely discounted, and they don't expect actual cut to provide much stimulus to these counters; SHK Properties (0016) down 2.5%, Henderson Land (0012) down 1.2%; HSBC (0005) and Hang Seng Bank (0011), near all-time highs, are flat while smaller peers, Bank of East Asia (0023) and Dao Heng Bank (0223), both down about 1%.(IVW)
1520 [Dow Jones] Singapore-listed SingTel has no comment on unsourced Oriental Daily report portal Sesami.com close to merger with HK-based Asia2B.com, which is jointly owned by Sun Hung Kai's SUNeVision (8008), Wharf (0004), New World Development (0017) and Beijing Enterprises (0392).(AXH)
1513 [Dow Jones] i-Cable (1097) falls 4.9% to $4.40 on rumors company may lose broadcasting rights to English Premier League. Anton Kwang, analyst at ABN Amro quotes management as saying, outcome of broadcasting rights talks however won't be released for two weeks. Says no doubt i-Cable will be affected if it loses another major football right but notes company in superior negotiating position due to absence of competition. Maintains Buy rating with target price at $5.40.(STT)
1509 [Dow Jones] HKD forwards up on expectations Hibor-USD Libor gap to narrow after this week's FOMC meet, says trader at European bank. But adds further upside limited as "the market has already priced in a 50-bp U.S. rate cut."(MEW/EAR)
1458 [Dow Jones] Despite Cathay Pacific's (0293) valuation appearing attractive at about 5.7X EV/EBITDA, Vickers Ballas says unfavorable macro-environment, with slowdown in traffic and stubbornly high oil prices, clouding company's outlook; suggests hold on stock, now down 0.8% at $12.25.(IVW)
1455 [Dow Jones] HSI remains stuck in tight range; now down 0.3% at 16046 vs midday close at 16025. Mild selling across the board but HSBC (0005) outperforms market, up 0.4% at $121.50. Turnover still razor-thin at $5.76 billion while investors wait for 2-day FOMC meeting starting tonight.(STT)
1450 [Dow Jones] SCMP (0583) has sold shares with book value of $60 million, realizing estimated gain of $20 million, which will likely be recognized in 1H01; UBS Warburg expects company to continue selling its investment portfolio in 2H01, leading to more gains. Since FY01 capex likely about $230 million, UBS expects cash-on-hand to fall to $420 million from $500 million. Advertising revenue growth may slow to 16% in FY01 from 17% but UBS maintains buy on stock with target price at $7.70; now up 0.9% at $5.85.(IVW)
1445 [Dow Jones] With Hang Seng January futures equilibrium settlement price almost set, spread between spot-month and February futures shrinking gradually, indicating roll-over activity mostly completed and some profit-taking likely in February futures, says futures trader at U.S. bank. February futures now down 0.4% at 16086; January futures down 0.4% at 16040.(STT)
1442 [Dow Jones] Buying 30% stake in Telekom Malaysia's cellular unit, as rumored, would be mildly positive for Hutchison Whampoa (0013), says Vickers Ballas; for investors interested in seeing how company will spend windfall from sale of Orange, management has indicated focus will be in expanding cellular business in emerging countries (so any Malaysian purchase would be in line with policy) and company's port operations. Vickers says stock fairly priced with limited upside but adds it's a core holding.(IVW)
1439 [Dow Jones] Analysts expect data from Thailand, Taiwan, Singapore and HK this week to confirm slowing money supply growth around region, with negative implications for consumer spending and stock markets. Fed rate cut should lead to Asian rate cuts but this may not turn situation around, given reluctance of many banks to lend and weak borrowing demand.(AXT)
1430 [Dow Jones] Lackluster Nikkei ends nearly flat, edging down 0.1% at 13827 ahead of FOMC meeting and U.S. GDP data, which traders say will influence position-taking. TSE Second Section, OTC market benefitted from reluctance to actively trade large-cap blue chips; broader Topix flat.(KIX)
1424 [Dow Jones] I-Cable (1097) expects single-digit rise in ARPUs in FY00 and doesn't expect to cut prices before new players enter market, says Salomon Smith Barney after visiting company. Adds programing costs should be flat on-year, with 25% of total operating costs associated with program production or purchase. Analysts say operational data on cable TV show robust growth. Stock down 5.4% at $4.375 on slightly light turnover worth $22.4 million. (STT)
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