PCCW May Reclassify Invests For FY
Tuesday, March 20 4:43 PM SGT
MARKET TALK-SG-KL: PCCW May Reclassify Invests For FY
1644 [Dow Jones] ABN AMRO expects Pacific Century CyberWorks to report interest cost of about HK$2.3 billion when it posts FY00 results March 28. Also notes PCCW has option of reclassifying some investments as long term and hence avoid write off; if it doesn't reclassify them, value of investment should fall HK$450 million; as of June 2000, PCCW had investments in 52 companies with estimated book value of HK$1 billion. PCCW's results will affect Pacific Century Regional Development (P15) share price as PCCW accounts for bulk of PCRD's assets; PCRD shares up 0.6% at 80.5 Singapore cents.(STT)
1638 [Dow Jones] SINGAPORE STOCK CALL: DBS Securities notes outsourcing wave from Japanese OEMs leading to growing presence of Japanese-styled EMS providers, whose design and manufacturing excellence could present strong competition as only Venture Manufacturing (V03) and few other existing listed EMS providers possess such qualities. Moving to cheaper locations could help cost competitiveness, but record of local EMS providers venturing into region less than impressive. Keeps neutral call on sector, with Venture as top pick, rated buy.(BXT)
1632 [Dow Jones] SINGAPORE: Analysts at local brokerages say Creative Technology's (C76) latest cost-cutting measures will offer some relief but may not be enough if PC demand deteriorates further. Company said late yesterday would cut costs by reducing work force by about 10% and by trimming select Internet initiatives. Analysts say worldwide PC inventory has yet to clear significantly; demand recovery may be postponed till after 2H. Say shares' rise today (up 1.8% at S$17.30) mainly on bargain-hunting and Nasdaq's strength.(SHG)
1629 [Dow Jones] SINGAPORE STOCK CALL: Merrill Lynch stays neutral on Creative Technology (C76) after company's announcement it will cut costs by reducing work force about 10%, reduce some Internet initiatives, take restructuring charge and write down US$65 million of investments. Merrill says market shouldn't be surprised by write-down; however, it's reviewing its earnings estimates for Creative.(AXT)
1625 [Dow Jones] MALAYSIA: Share of Powertek (6386) up 1.4% at MYR4.30 in razor-thin volume despite worries over shareholding structure; Business Times reported company fails to meet KLSE listing requirements as almost 84% of company owned by Tanjong PLC (2267), leaving less than stipulated 25% in public investors' hands. Trader says gains likely driven by major shareholders; shares may retreat tomorrow.(VGB)
1621 [Dow Jones] SINGAPORE STOCK CALL: Merrill Lynch keeps SembCorp Logistics (S60) as accumulate; says with sale of marine business, transition to pure logistics company almost complete. Says sales proceeds will help wipe off net debt of S$267 million by year-end and company will benefit from long-term trend of outsourcing logistics to drive cost savings.(EYG)
1614 [Dow Jones] SINGAPORE STOCK CALL: Salomon Smith Barney says UOB's (U11) falling FY00 core profits sign it may need more proactive capital management to improve 14% ROAE: higher dividend payout seems to be first step, while management seems in no hurry to divest non-core assets. Despite steady interest income, UOB may find it difficult to grow fees and contain costs near-term; loss-making units also still weighing on profits. Cuts FY01-FY02 profit estimates by 4%-8% but keeps outperform call due to recent share-price weakness; target price S$14.70, 16.6X P/E (shares up 1.7% at S$12.30).(BXT)
1612 [Dow Jones] MALAYSIA: Cement Industries of Malaysia (2844) shares down 4.1% at MYR1.18, extending losses for 5 consecutive days; trader says proposal to issue commercial papers and medium-term notes worth MYR100 million to purchase further 35% stake in Negri Sembilan Cement Industries viewed unfavorably by investors. Says increasing capacity at this juncture likely unprofitable especially when industry faces supply overhang.(VGB)
1608 [Dow Jones] ABN AMRO expects Pacific Century CyberWorks to write off goodwill worth HK$188 billion in FY00 if C&W HKT's assets aren't revalued; writing off entire goodwill against its equity will result in negative equity for FY00. However ABN expects PCCW to revalue assets in HKT but difficult to speculate on amount. Results due March 28. Pacific Century Regional Development (P15) shares up 0.6% at 80.5 Singapore cents.(STT)
1604 [Dow Jones] SINGAPORE TECHNICAL ANALYSIS: Despite gains today, charts indicate weakness ahead for Creative Technology (C76) shares, Dow Jones analyst Abdul Hadhi says. 30- and 100-day moving averages indicate downtrend still intact while MACD signal negative. Support at S$16.44 and subsequently at S$13.46 based on trendline analysis; shares up 2.4% at S$17.40.(AXH)
1554 [Dow Jones] SINGAPORE STOCK CALL: Salomon Smith Barney cuts DBS (D05) to neutral with target price of S$18.70 (17.2X FY01 P/E); shares down 0.6% at S$16.20. Also reduces FY01-FY02 earnings estimates by 10%-11% on challenging earnings and ROAE outlook. Says would reassess rating if DBS makes material regional acquisition or turns more aggressive in capital management; Salomon hopes bank can use its S$4 billion surplus capital and US$782 million hybrid Tier-1 offering toward these ends.(BXT)
1546 [Dow Jones] MALAYSIA: Cahya Mata Sarawak (2852) shares up 6.8% at MYR2.35, driven by speculative interest; trader says retail players accumulating stock in anticipation of company announcing involvement in multibillion-ringgit Bakun Hydroelectric Dam project in Sarawak; Finance Ministry had earlier suggested 5 companies invited to submit bids for coffer dam and river diversion works but declined to mention any names.(VGB)
1539 [Dow Jones] SINGAPORE TECHNICAL ANALYSIS: 30- and 100-day moving averages indicate further weakness for ST Assembly (S24) shares but downtrend smoothing out, suggesting weakness likely near-term, Dow Jones analyst Abdul Hadhi says. RSI also shows shares slightly oversold while signals from other technical indicators neutral. Trendline support at S$1.68; shares down 1% at S$1.95.(AXH)
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