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Technology Stocks : PCW - Pacific Century CyberWorks Limited -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (1739)	7/27/2001 11:11:44 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

Switkowski out of favour with big end of town By Cosima Marriner Dr Ziggy Switkowski's future as the chief executive of Telstra is under a cloud with institutional investors beginning to lose confidence in his management. Telstra shares fell 5c to $4.85 yesterday - their lowest close since February 1998 - in the wake of Thursday's two-hour briefing with analysts on the carrier's Asian joint venture with Hong Kong-based Pacific Century CyberWorks. Despite Dr Switkowski's best efforts to defend Telstra's growth plans, institutional investors are growing increasingly sceptical about the merits of its international strategy. The financial problems plaguing PCCW have thrown the viability of the entire joint venture in doubt. Telstra has already indicated it will write down the value of its $US1.7 billion ($3.3 billion) investment in Hong Kong mobile company Regional Wireless Co. It has also downgraded earnings forecasts for the Reach IP backbone company. Fund managers said institutional investors had lost confidence in the management of the nation's largest telecommunications carrier. "The feeling in the investment community would have to be at an all-time low," said one fund manager. "They all want change." In some investment circles, Telstra is now being described as "the next Pacific Dunlop". Brokers believe Telstra shares could sink as low as $4.50 as investor confidence crumbles. Market participants said that Telstra chief financial officer, Mr David Moffatt, was now openly manoeuvring for the chief executive's position. But there is unlikely to be any change at the top of Telstra unless the Labor Government wins this year's Federal election. A Beazley government is expected to examine all political appointments made under the Coalition. Some fund managers, however, questioned whether a change in leadership would solve Telstra's woes. One said: "Possibly someone else might be able to dress it up better but I don't think it's a Ziggy thing. It's being an incumbent in a market that has been opened up to competition." The cracks started to appear in Telstra early last month when the carrier warned earnings had grown just 5 per cent last financial year. This was half the double-digit figure investors had been led to expect. Telstra shares have been stripped of almost a third of their value since then. Retail investors who paid $7.60 for shares in the Telstra 2 offer last year are now 36 per cent under water on their investment. Thursday's update was Dr Switkowski's second attempt in as many weeks to rebuild investor confidence. He held a candid briefing with analysts and the media a fortnight ago, but his admission that earnings were likely to remain flat in the current half did little to soothe nerves.