MARKET TALK-HK: C&W May Swap PCCW Stake With Buyer
1032 [Dow Jones] C&W PLC willing to swap shares with buyer for its stake in Pacific Century CyberWorks (0008), says unsourced HK Economic Times report; adds buyer's shares need to have higher liquidity and institutional ownership than PCCW. Half of its 15% stake in PCCW can be sold after lock-up period expires Feb 17. Rumors emerged last week American International Group possible buyer, report says. AIG group of companies bought last year US$200 million exchangeable bonds in PCCW's parent Pacific Century Regional Development. AIG spokesman couldn't be reached for comments. Stock now up 1% at $4.85, after opening slightly lower.(SKO)
1022 [Dow Jones] HSI down 1.1% at 15902, after Wall Street's losses Friday, but selling not aggressive with turnover worth only $939 million so far. Mild looses across the board, led by heavyweight telcos China Mobile (0941) and China Unicom (0762). Uncertainty over further U.S. rate cuts in March, which had helped HSI to stay above psychological support at 16000 during past few sessions, keeps investors at bay. HSI likely to stay within 15800-16000 range today.(STT)
1017 [Dow Jones] With banks expected to announce encouraging FY00 earnings this week, salesperson at European brokerage predicts some bargain hunting in late session likely to help fend off selling pressure prompted by U.S. markets' fall Friday. Banking analysts expect healthy growth in bottom-line mainly due to lower provisions; note sluggish loan growth and stagnant net interest margins still long-term concern. FPB Bank will release FY00 results tomorrow, followed by Bank of East Asia (0023) on Thursday. Bank subindex down 0.9% at 24409.(STT)
1008 [Dow Jones] News government plans to lower House Ownership Scheme income ceiling from $31,000 to $25,000, will stimulate top quartile of HOS applications with monthly household income of $25,000-$31,000 to migrate to low-end private housing market, helping lifting sluggish private property sales, say analysts. Demand in private sector expected to improve in 2H01 on likely further rate cuts but residential prices unlikely to rise in near-term due to oversupply. Expect property shares to outperform amid expected HSI fall today.(STT)
1000 [Dow Jones] February HSI futures down 1.2% at 15980, in line with expected fall in cash market following Friday's pull back in U.S. stocks. However futures broker doesn't expect much further downside as positive effect from interest rate cut only starting to kick in; immediate support around 15800-15850, with strong support at 15500.(IVW)
0958 [Dow Jones] Next Media's (0282) confirmation it's in talks to buy print media operations from Chairman Jimmy Lai may suggest deal drawing closer. Could boost shares after they jumped 12% last Wednesday to 46.5 cents on rumors but then settled at 45 cents Friday. Market has been widely expecting deal however after Next Media said in November it was in talks with unidentified shareholder about buying print media businesses. Company said it has talked about businesses including Lai's popular Apple Daily, Next Magazine, Sudden Weekly, and Eat, Travel & PC Weekly, but stressed no definite terms agreed so far. Possible acquisition may be paid for by either new shares, convertible notes, or combination of both.(ASJ)
0956 [Dow Jones] Indicative bids for Australia's Cable & Wireless Optus' assets due this week, say media reports over weekend; U.K.-based Cable & Wireless, Singapore Telecom and Vodafone among contenders. Hutchison Whampoa (0013), which earlier expressed interest by conducting due diligence on assets on offer, not expected to tender bid; reports unlikely to impact Hutchison shares, which closed down 0.5% at $103.(IVW)
0955 [Dow Jones] USD/HKD mostly steady, now 7.7999 vs 7.7998 late Friday. With gap between USD Libor and Hibor rates narrowing, little likelihood of big arbitrage trades, HK trader says; moves likely to depend on corporate demand.(EAR)
0954 [Dow Jones] HK trader says early rise in short-dated Hibor due to some corporate demand for short-dated funds and in line with USD Libor rise late Friday, after mixed U.S. jobs report for January. But notes slide in longer-dated rates, saying 1-year Hibor - now 5.00% vs 5.12% late Friday - down on anticipation of further 50-100 bp rate cut in U.S., HK in coming months.(EAR)
0951 [Dow Jones] HSI expected to open down 1%-1.5%, following U.S. economic data released Friday, which put hopes of another interest rate cuts by Fed in March in doubt, says Steven Leung, sales head at Vickers Ballas. Says straight forward interpretation impossible as U.S. January jobless rate rose higher-than-expected but January non-farm payrolls climbed unexpectedly, sending U.S. markets down Friday. However expects HSI to end at around 15800 psychological support, supported by encouraging property sales over weekend after government changed House Ownership Scheme income qualifications, making private housing more affordable to new home buyers.(STT)
0950 [Dow Jones] Asia Satellite (1135) and APT Satellite (1045), which between them operate 6 of 10 satellites used in China's satellite communications market, may not be approved operators under new state policies, says Apple Daily; notes both companies, being listed in HK and partly foreign-owned, not included in approved list of Chinese satellite operators under regulations announced last September, and laws regarding foreign operators still not enacted; says both companies not aware of any status change making their operations illegal. Brokers think some investors may be concerned that there could be repeat of earlier confusion in mainland laws over mobile and cable operators. Stocks likely to fall on report.(IVW)
0947 [Dow Jones] China Securities Regulatory Commission plans to revise and standardize China's information disclosure system in next 2 years. In notice published in Securities Times, CSRC acknowledged current system has several problems that must be addressed as soon as possible. Lack of timely, transparent disclosure among listed companies one obstacle hampering development of domestic capital market.(RPD)
0938 [Dow Jones] City Telecom (1137) may announce today new IDD call scheme which will cut rates to mainland China, reports Apple Daily; says, though company spokesman declines to reveal details on new scheme, City Tel may not only reduce rates but also introduce additional discounts to customers' monthly bills. Competition in HK IDD fierce, with per minute long distance call rate to North America at one point lower than local mobile rate. Wharf's (0004) unit New T&T close competitor to City Tel in retail market.(IVW)
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