Hong Kong Stocks Review: Pacific Century
surges, boosts techs
By Rekha Sujanani, Bridge News Hong
Kong--Dec 23--High-technology company
Pacific Century CyberWorks helped pull the
Hang Seng Index up 0.64% Thursday, after the
stock soared on speculation of a possible tie-up
with US giant Microsoft Corp, said brokers.
Pacific Century, while not a composite stock in
the benchmark index, drove up share prices in
technology and telecom composite companies,
they said. The index closed up 103.68 points at
16,296.08. Turnover surged to HK $16.6 billion
(US $2.1 billion) compared to $11.6 billion
Wednesday, boosted by huge turnover on
Pacific Century.
* * * Pacific Century, responsible for the
soon-to-be-built CyberPort software
development park in Hong Kong, shot up to a
record high of $18.20 in early trade before
closing 41.18% higher at $15.60. The stock
dominated market activity with a whopping 5
billion in turnover, representing 30% of total
market volume. Interest in the counter
escalated after the Chinese-language Apple
Daily newspaper reported that the company
might be considering a listing on the US
NASDAQ and a share swap with US software
giant Microsoft Corp, brokers said. Pacific Century later denied any
rumors of a deal with Microsoft, but investors were speculating
regardless as the stock was caught in a buying frenzy, said brokers.
"Most people believe that Pacific Century will list on the NASDAQ at US
$2.00, and thus the stock has surged to the Hong Kong dollar equivalent
(HK $15.60) on the local market," said Asia Financial Securities
research manager Kinson Au. The Hong Kong unit is pegged to the US
dollar at 7.8. "If Pacific Century decides to list at around US $3.00, we
will see another rally pushing the stock to over HK $20.00," he added
optimistically. The performance of NASDAQ stocks and Pacific
Century's dramatic rise triggered some fund managers to reassess their
shareholdings in technology stocks, and led them to accumulate key
stocks in anticipation of further rises, said Ricky Tam, head of research
at Delta Asia Securities. But an element of "window-dressing" was
apparent also, as fund managers wanted to include key technology
stocks in their portfolios for this year, he added. This speculative trend is
expected to continue in the short-term until there is a major correction in
the NASDAQ, say brokers. Interest in the blue-chips Thursday was
much quieter, said brokers. Activity was mostly concentrated on
technology plays with the euphoria over tech counters pushing Cable &
Wireless HKT and China Telecom (Hong Kong) higher. Cable & Wireless
HKT climbed $0.35 to $23.05 and China Telecom rose $0.80 to $42.00.
Hutchison Whampoa basked in the afterglow of Pacific Century, the
companies being linked by the Li family, said brokers. "Hutchison and to
some extent Cheung Kong were boosted because of Pacific Century
because investors grouped all 3 companies under the same umbrella of
the Li Ka-shing-linked companies," said Asia Financial Securities
research manager Kinson Au. Hong Kong tycoon Li Ka-shing controls
Hutchison and Cheung Kong, but his 2 siblings control their day-to-day
operations, and one of which, Richard Li, controls Pacific Century.
Hutchison Whampoa jumped $1.50 to close at $110.50 and Cheung
Kong ended flat at $96.75. Blue-chips are expected to trade range-bound
in the run-up to the new year, with a strong support seen at 16,000, said
brokers. "The index is likely to stay on an upward path led by the
telecom counters but we won't see any substantial upside until after the
New Year holiday," said Au.