Hong Kong Stock Index Falls to 22-Month Low; China Mobile Leads
By Yeong Choy Leng
Hong Kong, April 4 (Bloomberg) -- Hong Kong's key stock index fell to a 22-month low, led by China Mobile (Hong Kong) Ltd. and China Unicom Ltd. as declines in peers Nokia Oyj and Deutsche Telekom AG fueled concerns about the telecommunications industry's outlook.
Nokia shares slumped 7.3 percent after the biggest cellular phone maker agreed to provide financing for France Telecom SA's mobile phone unit Orange SA to build faster wireless networks.
``This should be good for network operators with vendors helping to finance, but people are not differentiating that,'' said Charle Peza, head of telecommunications research at Lehman Brothers Asia Ltd. ``When global telecoms fall, people just want to cut their telecom exposure. It's irrational.''
China Resources Enterprise Ltd. and other mainland-related companies added to losses as a diplomatic deadlock between China and the U.S. over the release of the latter's plane and its 24- member crew entered a third day.
The Hang Seng Index fell 520.51, or 4.1 percent, to 12,063.71, its lowest since May 31, 1999. The Hang Seng Information Technology Index plunged 8.7 percent.
In the broader market, 12 stocks fell for every one that rose. Trade at HK$7.8 billion ($1 billion) was 87 percent of the daily average for the past three months.
The following is a list of companies whose shares were active.
Telecommunications and computer-related stocks fell along with their global peers and after the Nasdaq Composite Index lost 6.2 percent. Vodafone Group Plc, the world's largest wireless company, fell 4.8 percent. Deutsche Telekom AG fell 5.8 percent as Germany's dominant phone company must lower prices by more then 5 percent for domestic competitors seeking to use its local network, the nation's phone regulator ruled last week.
China Mobile (Hong Kong) Ltd. (941 HK ), China's largest publicly traded mobile telephone company, fell HK$3.20, or 9.7 percent, to HK$29.70, its lowest since Nov. 8, 1999. China Unicom Ltd. (762 HK ), a unit of China's second-largest telephone company, fell 70 cents, or 8.2 percent, to HK$7.85. Legend Holdings Ltd. (992 HK ), China's biggest computer maker, fell 35 cents, or 6.6 percent, to HK$4.95.
China-related stocks fell as tensions between the mainland and the U.S. mount. U.S. President George W. Bush said bilateral ties may suffer if China doesn't quickly release the 24-member crew and navy surveillance plane that made an emergency landing in China on Sunday. Cosco Pacific Ltd. (1199 HK ), the Hong Kong arm of China's biggest shipping company, fell 15 cents, or 3.3 percent, to HK$4.425. China Resources Enterprise Ltd. (291 HK ), the Hong Kong-listed investment arm of China's foreign trade ministry, fell 55 cents, or 5.4 percent, to HK$9.65.
Banks and developers fell after the Dow Jones Industrial Average slid 3 percent, renewing concern the U.S. economic slowdown will drag down global economies. HSBC Holdings Plc (5 HK ), the U.K.-based parent of the city's two largest lenders, fell HK$2.25, or 2.5 percent, to HK$89.75. Cheung Kong (Holdings) Ltd. (1 HK ), Hong Kong's biggest real estate developer, fell HK$2, or 2.4 percent, to HK$80.50.
Companies that went ex-dividend declined as any investor who buys the stocks from today onwards won't be entitled to the latest payout. Amoy Properties Ltd. (101 HK ), Hong Kong's fourth- largest real estate company, fell 40 cents, or 4.6 percent, to HK$8.25. Hang Lung Development Ltd. (10 HK ), one of Hong Kong's biggest property companies, fell 20 cents, or 2.9 percent, to HK$6.65. Sino Land Co. (83 HK ), a medium-sized developer, fell 17.5 cents, or 5.1 percent, to HK$3.25.
China National Aviation Co. (1110 HK ), which owns Hong Kong Dragon Airlines Ltd., fell 3 cents, or 2.5 percent, to HK$1.17. The company will probably report on April 6 that 2000 profit rose 46 percent to HK$309.2 million because Dragon Airlines carried more passengers and cargo, according to the average forecast of six analysts in a Bloomberg News survey.
China Shipping Development Co. (1138 HK ), the nation's biggest domestic cargo shipping company, fell 4 cents, or 3.3 percent, to HK$1.17. The company said it plans to raise 1.45 billion yuan ($175 million) by selling new shares domestically to buy 24 tankers and invest in its container unit. The stock staged its biggest four-day gain in almost a year, gaining 27 percent, for the four days ended Monday.
CLP Holdings Ltd. (2 HK ), Hong Kong's biggest power generator, fell 60 cents, or 1.4 percent, to HK$41.10. The company may sell domestic shares in its mainland venture, CLP Guohua Power Co., Ming Pao Daily reported, citing a UBS Warburg research report. CLP said the decision rests on its partner, Shenhua Group of Shanghai. The stock gained 12 percent in the past three months.
Pacific Century CyberWorks Ltd. (8 HK ), Hong Kong's largest telecommunications company, fell 12.5 cents, or 4.6 percent, to HK$2.60, rounding off a 26 percent loss in the past six days. Major shareholder Cable & Wireless Plc said it plans to unload its 14.7 percent stake in the company by selling $1.5 billion of bonds exchangeable into CyberWorks shares.
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