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Technology Stocks : PCW - Pacific Century CyberWorks Limited

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To: ms.smartest.person who wrote (1729)	7/26/2001 8:43:56 PM
From: ms.smartest.person	Read Replies (1) of 2248

Share price is 'hostage' to world market: Ziggy By LEONIE WOOD Friday 27 July 2001 Telstra boss Ziggy Switkowski acknowledged yesterday that the group was "distressed" by the steep slide in the carrier's share price as Australia's most widely held stock again plumbed three-year lows. Telstra sank nine cents to $4.90 yesterday, despite management conducting a three-hour briefing to improve investor confidence in its joint-venture strategy with Hong Kong partner Pacific Century CyberWorks. The shares are now one-third off the $7.40 price of the Federal Government's $16 billion Telstra 2 issue, and are 27 per cent below levels of early June when the carrier warned of a significant profit slowdown. In Hong Kong, PCCW's shares are more than 90 per cent below the price Telstra originally agreed to pay for a stake as part of the first plan to share assets. Although the briefing failed to enthuse analysts, Telstra revealed it had learned many lessons from the upheaval of the past year. Dr Switkowski argued that global telecommunications companies had been hit hard in the past 18 months as carriers took on huge debts to pay for acquisitions and third generation wireless spectrum in Europe. Competition had intensified and profit margins were crushed. Asked when he expected sharemarket sentiment to turn, Dr Switkowski noted that the industry partly remained "hostage to the global economy". But much depended on how fast the carriers could repair their balance sheets and so restore stable pricing and profit margins. "So a combination of judgments about the global economy, the condition of the larger players, the onset of new services, will then lead you to form a view about when share prices might recover," he said. "But at the moment, it is clear: Sentiment towards this industry sector remains negative. "We are clearly distressed with where the share price is at the moment, although understanding that in the global re-evaluation of telcos, Telstra's slide has probably not been as deep as others. (Yet) that is hardly a satisfactory claim to make." The reporter owns Telstra shares. This story was found at: theage.com.au

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