Quamnet: Evening Wrap: HSI lost 174pts, PCCW (8) down 6.4% on High Volume
--------------------------------------------------------------------------------
Evening Wrap: HSI lost 174pts, PCCW (8) down 6.4% on High Volume
Mar 29, 2001 - 18:58:08 HKT
QuamResearch
The expiry day of March futures contracts was a bit quieter than we expected. Hang Seng Index traded in a narrow range of between 12,524 and 12,769 before closing at 12,678, down just 174 points from the previous day despite huge losses in the U.S. markets. But the stock of the day, PCCW (8) was just unable to behave itself.
Do you remember one of our PCCW (8) articles titled "To 3 or not to 3"? Today we got the answer. This fallen angel touched an intraday low of $2.975, the lowest point since August 1999, before bouncing back to $3.25, down 6.4% from the previous day. Turnover increased 3.8 times to $679 million, the second most active stock after HSBC (5).
Banks
Among the four constituent banks, three were in the red. HSBC, which recorded $699 million turnover, lost $1.25, or 1.36% to $90.75, contributing to 25% of the Index losses. BEA (23) gave up 30 cents at $17.55. Hang Seng (11) lost 75 cents to $90.75. The only gainer was Dao Heng (223), which managed to gain 30 cents to $36.10. Outside the Index, Dah Sing (440) and Wing Hang Bank (302) were the major casualties, both losing $1 to respectively $35.50 and $24.60. Wing Lung Bank (96) lost 10 cents to $33.40. ICBC (Asia), which is expected to be injected assets from its parent ICBC, the largest commercial bank in mainland China, bucked the market with a 10-cent gain to $6.95.
Properties
Properties were mixed. Both Hang Lung (10) and Henderson Investment (97) lost more than 4% to their respective closing prices of $6.85 and $5.55. Both counters are now valued at around 10 times historical PE and their dividend yield were attractive (#10: 7.66% and #97: 4.14%), which might be a possible value investment. Cheung Kong (1), after KS Li's denial of share placement rumours on Tuesday, rose 50 cents to $80. Hysan (14), which has lost more than 20% in the past two weeks after the announcement of disappointing FY00 results, regained some lost ground today. Its shares rose 30 cents, or 2.56% to $12.
Com & Ind.<
China Mobile (941) lost 70 cents, or 2% to $34.40 whereas its non-constituent little brother, Unicom (762) tested a historical low of $8.10 before closing at $8.25, down 30 cents from the previous day.
Li & Fung (494) found itself lack of oxygen at the $12 level despite its strong FY00 results. The counter lost 55 cents, or 4.4%, at $11.95. While this is an excellent company, the current price, representing a historical PE of 37x, gives investors little margin of safety.
Outside the Index
Outperforming the Index were China plays. The Hang Seng Red-chip Index, which tracks mainland backed companies incorporated in Hong Kong, was down just 0.04% to 1,031 while the H-share Index, the barometer of mainland national enterprises, rose 2.2% to 401.
Among the winners were First Tractor (38), which went up 11.4% at 78 cents despite its profit warnings. Steel makers Chongqing Iron (1053), Maanshan Iron (323) and Angang Newsteel (347), which rose between 7% and 9.5% on projected rising steel demand, were among the biggest gainers. Shenyang Public (747), which used to be one of our favourites, rose 9.6% to $1.60. The counter at the current price, which represents a historical PE of 6.1 times with dividend yield of 6.8%, remains cheap, but we are worried about its di-worse-sification into the mainland property market.
Cosco Pacific (1199) reported a 6% growth in net profit to US$142.5 million (HK$1.11 billion, EPS: 52 HK cents) for FY00. A final dividend of 11 cents (FY99: 10.5 cents) will be paid. Cosco Pacific, which has lost almost 50% from its 52-week high, regained 2.5 cents to $4.30 today. At this price, Cosco Pac is valued at 8.3 times historical PE with a dividend yield of 4.5%. This seems to be a reasonable investment at the current price, although there is little growth potential. Details of Cosco Pacific's results will be analysed tomorrow.
--------------------------------------------------------------------------------
Copyright 2000 Quam(IA) Limited, All rights reserved
quamnet.com |
