Hong Kong Stocks: Shares Finish Slightly Lower; CyberWorks Takes Spotlight
January 18, 2002
Dow Jones Newswires
HONG KONG -- Shares closed slightly lower Friday with the spotlight on Pacific Century Cyberworks after the company said it plans to tap the market for more funds.
The Hang Seng Index ended down 40.88 to 10972.96. Volume was worth 5.99 billion Hong Kong dollars.
PCCW will issue US$450 million in five-year convertible bonds via Morgan Stanley, raising up to US$517.5 million if an over-allotment option is exercised.
The telecom giant was the session's most active stock, accounting for HK$492.97 million, or 8.2% of the day's total trading volume.
PCCW closed down 3.4%, or 7.5 Hong Kong cents at HK$2.15. The new bonds carry a conversion price of HK$2.75.
Investors reacted negatively to the PCCW bond issue on Friday, as one of the company's earlier fund-raising exercises had sent the shares down to a new low, said Herbert Lau, head of research at Celestial Asia Securities. There is positive news too as the bond issue will help the company cut costs. Mr. Lau also said there was short-selling pressure on the share.
The second biggest loser among blue chips was Legend Holdings, which topped the list of gainers Thursday, rising 6.5% on a research report touting strong sales figures for the Chinese computer maker. On Friday, the share fell victim to profit-taking, sliding 3.1% to HK$3.975.
Among the better performers, CNOOC jumped 2.6% to HK$7.80 after announcing plans to buy the Indonesian assets of Pepsol-YTF for US$585 million. Cathay Pacific Airways rose 2.4% to HK$10.75, while its parent Swire Pacific gained nearly 2% to HK$41.70.
Analysts attributed the gains to falling oil prices and expectations for a recovery in the aviation sector. The airline announced late Thursday that passenger traffic fell 2.4% in December year-on-year, while cargo numbers slipped 1% in December, indicating a gradual recovery from October and November when traffic fell more sharply in the wake of Sept. 11.
HSBC Holdings rose 50 Hong Kong cents to HK$88, recovering slightly after the recent selloff driven by concerns about its exposure to the Argentina debt crisis. News that Citigroup announced earnings at the high end of expectations helped HSBC, analysts said.
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