Week in Review: Seven Down -- Market Drops 4%+ For the Week
Seven Consecutive Down Days. As a city, we outshone ourselves this time, didn't we!
Hong Kong's stock market did not perform terribly well this week as it kept up the decline set in motion the previous Wednesday. The U.S. at rest on Monday also didn't help as HK waffled without direction, and when the U.S. did come back to play, a number of influential stocks came out with disappointing earnings or earnings warnings.
The local property market received continued pressure as the combination of a potentially distressed -- or least slightly depressed -- local economy and a lower chance of more interest rate cuts caused punters to exit the sector, providing some interesting buying opportunities.
There was, however, considerable attention given to China plays this week as changes in the PRC's B share market -- allowing in more foreign funds -- and the promised high growth of the mainland economy together attracted punters like government chicken slaughterers to an Urban Council wet market.
Finally, several HSI changes took effect today. That caused a certain amount of portfolio reshuffling and was probably the main cause behind the large turnover of the past several days.
In the end, the HSI closed down more than 600 points for the week, nearly 4.5%.
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Weekly Brief
The Hang Seng Index ended down 612.61 points, or 4.45 percent, at 13,141.38.
The Growth Enterprise Market index was up 8.36 points, or 0.03 percent, at 285.55.
Movers of the Week:
5 Biggest Rises:
0512 China Apollo Hldgs (+105%) HK$0.242
8118 hkcyber.com (+102%) HK$0.083
1192 Gemzboh Hldgs (+78.3%) HK$0.082
8036 36.com Holdings (+74.2%) HK$0.054
8063 Trasy Gold Ex (+71.4%) HK$0.048
5 Biggest Falls:
0288 Berjaya Holdings (-27.8%) HK$0.13
0139 139 Holdings (-26.7%) HK$0.033
8088 Techpacific.com (-23.8%) HK$0.109
0926 Egana Jewellery (-22.7%) HK$0.143
0952 Wah Fu Int'l Hldgs (-22.2%) HK$0.063
Banks On The Downside: Exploring the PRC
The Hong Kong Monetary Authority (HKMA) yesterday published the latest issue of its Quarterly Bulletin. According to the HKMA, the operating profits of local banks declined slightly for the first quarter ended 31 March, 2001 due to narrowing net interest margins. We originally expected banks to show admirable growth this year; however, the HKMA's reports and Dao Heng's interim results show that the outstanding growth may not appear again this year though a mild net profit increase is still expected.
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Hutch (13): Ports and Telecoms Update -- Korea A Go, VoiceStream Cash Received
We have been following the recent news of Hutch's ports business expansion, and the company finally announced that their first foray into Korea is a go. The company also reported on the VoiceStream (VSTR) merger with Deutsche Telekom (DT). The amount of cash that Hutch is getting out of the deal, however, is a little less than expected.
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Upcoming Events for Next Week
A number of red chips will go ex-dividend next week, including Beijing Enterprises (0392) on Thursday; and China Resources Enterprise (0291), China Merchants Holdings (0144) and Guangdong Brewery (0124) on Friday. A few other companies will report earnings, most notably being Johnson Electric (0179) on Friday. Two IPOs will make their debut too. They are MRC Holdings (8070) on Tuesday and Prime Investment (0721) on Friday.
*For details, please refer to the Quam Market Calendar
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