The coming week will continue to be volatile as investors are waiting for signs of stabilization in Tokyo, the world's second largest market, and the Nasdaq, the hottest potato in stock market history.
Weekly Outlook: Volatile Week
Mar 05, 2001 - 11:32:31 HKT
QuamResearch
The coming week will continue to be volatile as investors are waiting for signs of stabilization in Tokyo, the world's second largest market, and the Nasdaq, the hottest potato in stock market history.
Both the Nikkei-225 and the Nasdaq Composite hit new lows not seen in years last week as investors continue to sell IT shares on hearing repeated disappointing results. In the local market, there were rumours that Janus Capital, a U.S.-based equity fund which holds $12 billion worth of China Mobile (941), is dumping shares of China Mobile to satisfy investors' redemption calls. Having evaporated $286 billion or 30% of its capitalisation, Mobile could have a quick rebound at the beginning of the week. Friday's closing price represents a prospective PE of around 29 times for FY01, still a bit overpriced considering that the political risks potential investors have to bear. If Mobile rebounds back to prices close to $40 a share, it should be a good chance to cut losses.
There are news reports that the U.K. Competition Commission is considering restricting four major banks including HSBC (5) from expanding their businesses in the U.K. The news may further dampen HSBC's share price for a while.
Investors are expecting good results from Dah Sing Financial (440), Wing Hang Bank (302) and H share electricity suppliers BJ Datang (991) and SD Power (1071) and toll road operator Zhejiang Expressway (576). Dah Sing and Zhejiang Expressway will announce their FY00 results today. HK Electric (6) on Thursday should report stable earnings at $5.5 billion (HK$2.65 per share).
The most interesting results should be from Cathay (293) and its holding company Swire (19), which will announce annual results on 7 March and 9 March respectively, and Giordano (709). Cathay should report good recurrent growth in FY00, but investors are more interested in the management discussion on the outlook in the coming year. Swire's rental income should also report stable growth, but the company has to make provisions for its land premiums in Causeway Bay which the government claims they should have paid years ago. After Esprit's (330) reporting better than expected results, investors will definitely compare Giordano's annual results, which will be out on Thursday, with its peer.
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