STOCKWATCH - Hong Kong telecom hi-tech shares lower on US profits concerns
2001-07-10
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Hong Kong telecom and hi-tech shares were lower this morning as sentiment was undermined by a series of profit warnings from their US peers last week, dealers said.
They said the US hi-tech companies may continue to disappoint investors in the third quarter as signs of economic recovery have been unconvincing.
At 11:13 am, the Hang Seng Index was down 379.98 points at 12,619.50, on turnover of 3.36 bln hkd.
China Mobile was down 2.20 at 38.60, China Unicom fell 0.60 to 13.30, and Pacific Century CyberWorks dropped 0.075 to 2.30.
Great Wall Technology was down 0.125 at 2.25 and Legend shed 0.175 to 4.175.
On the GEM board, Tom.com eased 0.05 to 2.05 and Sunevision dropped 0.06 to 1.66.
Eugene Law, an analyst with Shenyin Wanguo Securities, said local investors were nervous about the profit warnings among the US hi-tech companies.
"The local market was sentiment-driven...it should not be surprising to see the downturn of hi-tech and telecom stocks this morning, after the profit warnings of their US counterparts," he said.
He said further profit warnings are expected from US hi-tech companies in the third quarter as the US economy is unlikely to receive an immediate boost from the Fed's interest rate cuts in the first half of this year.
"Also, when we talk about hi-tech and telecom stocks in Hong Kong, we include those in China, like China Mobile, China Unicom and Legend," he said.
Jack Tsui, an analyst with South China Brokerage, agreed that it would be difficult for the US high-tech companies to turn around their businesses overnight.
"However, in the longer term, the outlook may not be so bleak. I had a meeting with a US-based semi-conductor company...the company suggested that financing for hi-tech companies is fairly adequate in the US, but somehow investors are now more selective," he said.
He said the number of profit warnings in the second quarter far exceeds that in the first quarter.
"From this perspective, their business should continue to pick up in the longer term," he said.
Local investors will need more time to rebuild their confidence in hi-tech stocks, he said.
wl/pb
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