PCCW Plunges to New Low Ahead of FY Results on Wed. (Update2)
Mar 26, 2001 - 17:37:07 HKT
Quamnet News Service
Pacific Century CyberWorks (0008), a major Asian communications company which owns Hong Kong's largest phone company, tumbled as much as 6.3 percent to its new 52-week low on pessimism that it will post huge losses for full-year 2000.
PCCW shares ended down 3.5 percent to HK$3.45 on turnover of HK$305.2 million. Richard Li's company had fallen to HK$3.35 during the morning session to a 52-week low.
"PCCW is under strong selling pressure on anticipation that Richard Li's company has to make a huge write-off on the goodwill of Cable & Wireless HKT Telephone Ltd., which will lead to heavy loss in its (full-year) results to be announced this Wednesday," said Patrick Yiu, associate director of Kingsway SW Securities Ltd.
Analysts mostly forecast that PCCW will register a loss in its first post-merger results.
Nomura International telecoms analyst Richard Ferguson expects a year 2000 loss of HK$2.58 billion (US$331 million) and has an "underperform" rating on the stock.
UBS Warburg estimated that PCCW will see a HK$374 million loss for the year, but is recommending a 'buy' on the stock.
Meantime, the British newspaper The Times reported that Cable & Wireless will consider a share buyback or paying a special dividend to shareholders after the sale of its Australian subsidiary to Singapore Telecom. Taco Sieburgh Sjoerdsma, analyst at Commerzbank, said in a recent note that C&W would announce a share buyback given its burgeoning cash pile. He says a buyback of 10 per cent of the shares could be earnings positive, before goodwill and exceptionals, from 2003, according to the U.K. newspaper.
Last year C&W received 450 million shares in Richard Li's PCCW after the sale of its Hongkong Telecom business. The U.K. firm can now sell a 7.5 percent stake, or half of its PCCW holding as the lock up period expired in February.
quamnet.com |
