HK stocks end higher on U.S., China's phone giants
July 3, 2001 5:26am
Source: Reuters
(Add details)
HONG KONG, July 3 (Reuters) - Hong Kong stocks ended firm on Tuesday, supported by U.S. gains and strength in shares of China's two mobile phone giants after they said a regulatory move to scrap connection fees should stimulate demand and user growth.
The benchmark Hang Seng Index finished up 1.09 percent or 142.22 points at 13,184.75. The index is off about 12.66 percent so far this year.
Shares of China Mobile, China's largest mobile phone company, rose 2.67 percent or HK$1.10 to HK$42.30 while that of rival China Unicom climbed 1.1 percent to HK$13.75.
Both stocks have risen in the wake of announcements that China has plans to eliminate user fees for new mobile phone connections, starting July 1.
China Mobile said it collected about HK$620 million (US$79.4 million) in new user connection fees in the first five months of this year, but added that it did not expect the move to have a major impact on revenue as it may promote subscribers' growth.
Number-two carrier China Unicom said regulators also had abolished fees it must pay for local telephone trunk installations, adding that the net impact of the fee elimination would result in a 70 million yuan decrease in second half profit.
However, it said the attendant increase in demand that it expects from the elimination of mobile network fees means the new fee scheme should not hurt overall performance.
In the broader market, technology and banking stocks, bolstered by good news on the U.S. economy, fared better than property issues. Property issues were still suffering from an overhang of unsold residential units, dealers said.
Shares of China's largest computer maker, Legend Holdings HK) , rose 2.29 percent to HK$4.475 while those of global
Shares of China's largest computer maker, Legend Holdings HK) , rose 2.29 percent to HK$4.475 while those of global bank HSBC were up 0.81 percent to HK$93.
U.S. manufacturing orders rose more than expected last month, sparking hopes that the world's largest economy may be in better shape than previously thought.
Cathay Pacific Airways also ended higher but the stock was volatile after the airline's pilot union said its members had begun to work to rule from Tuesday in a dispute over pay and working conditions.
Cathay ended up 1.42 percent at HK$10.70. The stock, which has tumbled from a 52-week high of HK$17.80 last August, offers good value for some investors but probably has little upside while the labour troubles persist, analysts said.
Internet and telecom play Pacific Century CyberWorks rose 1.12 percent to HK$2.25 despite news that its attributable loss for 2000 was HK$14.57 billion (US$1.87 billion) under U.S. accounting calculations. That was more than double the figure the company reported under Hong Kong accounting rules in March.
The news was little surprise to investors who were looking forward to the company's upcoming announcement on Wednesday when it is expected to unveil a revamp of its consumer Internet efforts.
PCCW shares have already shed well over 80 percent in the past year as investors lost confidence in the company's ability to devise a clear business strategy.
In the short term, fund managers and analysts expected the Hang Seng Index's upside potential to be capped by the Hong Kong governments quarterly sale of units in its Hong Kong Tracker Fund Hong Kong Tracker Fund closed at HK$13.25 per unit, up 0.38 percent.
Market watchers said the sale of 900 million Tracker Fund units, worth an estimated HK$12 billion, could take all week to complete.
Volume of HK$12 billion (US$1.54 billion) is not an overwhelming amount but enough to restrain buying interest in blue chip stocks, market watchers said.
The Tracker Fund was established to dispose of the government's share holdings acquired in a controversial stock market intervention during the Asian financial crisis in August 1998.
Total market turnover was a modest HK$7.625 billion with losers outpacing winners 301 to 181 and 269 issues unchanged.
US$1-HK$7.8
US$1-8.28 yuan ^ REUTERS@ |
