20000218

Hong Kong stocks end lower but C&W HKT up

HONG KONG: Hong Kong stocks ended on Thursday modestly lower as rumours that Pacific Century CyberWorks (PCCW) might have secured a deal for Cable & Wireless HKT were unable to outweigh a blue chip sell-off.

The benchmark Hang Seng Index, which was in negative territory for much of the morning but rose as high as 17,229.15 in the afternoon, finished down 0.36 percent or 62.16 points at 16,981.23.

Turnover was HK$25.56 billion (US$3.28 billion) compared with Wednesday's $26.62 billion.

"The market is still dominated by the merger talk between Pacific Century and C&W HKT and there's still a lot of rumours surrouding the merger," said Y.K. Chan, research director at Century City Securities Ltd.

Amid a swirl of rumours, PCCW said no formal agreement had been reached over C&W HKT.

While C&W HKT managed to keep the Hang Seng in positive territory for much of the afternoon, Hong Kong's largest telecom carrier was unable to offset falls by fellow heavyweights China Telecom (Hong Kong) Ltd and Hutchison Whampoa Ltd

This followed a blue chip sell-off on Wall Street ahead of U.S. Federal Reserve Chairman Alan Greenspan's testimony to Congress later on Thursday.

Investors are waiting to see if Greenspan gives clues on how aggressive the Fed will be about raising rates.

C&W HKT rose 6.26 percent or HK$1.50 to HK$25.45 after hitting HK$26.60, while Pacific Century jumped 1.77 percent or HK$0.45 to HK$25.80.

Singapore Telecommunications Ltd said on Thursday it was still in talks with Britain's Cable & Wireless Plc to buy its majority stake in C&W HKT.

Gains for PCCW and C&W HKT did not spread to other telecoms companies, as investors continued to take profits on tech-related firms, traders said.

Blue chip China Telecom fell 2.4 percent or HK$1.50 to HK$61.00, while Hutchison dropped 3.50 percent or HK$4.50 to HK$124.00.

HSBC Holdings Plc shrugged off interest rate concerns, adding to Wednesday's 5.41-percent rise amid positive sentiment for bank earnings.

"Investors are looking forward to bank results after they have been discounted so much," said Chan.

Most of Hong Kong's major banks report this month, with HSBC and Hang Seng Bank Ltd announcing final results on February 28, and traders said banks' prospects looked brighter looking ahead.

HSBC, Hong Kong's largest bank, finished up 0.51 percent or HK$0.50 at HK$93.00 after falling 23 percent since January 3 to a low on Tuesday.

Utilities joined banks in moving higher, with the Hang Seng Utilities Index rising 2.73 percent as investors continued to look for value stocks with good names.

"People are staying more cautious on the leading blue chips and looking at market laggards," said Stanley Ng, research manager at Mansion House Securities.

CLP Holdings was a big utility gainer, jumping 3.42 percent or HK$1.10 to HK$33.20. CLP Holdings, which has jumped 12 percent since Monday's close, said on Thursday its 15 month net was HK$10.12 billion.-Reuters