SA/IPO: Bring It On !!!
Friday, April 13, 2001
Buyers pounce on techs
Dao Heng Bank takeover and Nasdaq bounce power HSI recovery
DAVID WILDER
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Hong Kong investors on Thursday went on an Easter egg hunt for stocks as a major local takeover, a United States technology stock bounce and a breakthrough in the US-China spy-plane stand-off boosted sentiment.
The Hang Seng Index moved up 2.22 per cent to 12,989.47 points on a healthy turnover of HK$10.02 billion, bringing gains for the past two sessions to 6.35 per cent.
"It's a real vote of confidence," Dao Heng Securities institutional sales head Raymond Tsui Yick-ki said. "There was a little bit of profit taking in the afternoon but the market was still strong enough to hold its ground before the long weekend."
Technology, media and telecommunications stocks were at the forefront of the buying, with China Mobile leading the pack as it climbed 1.38 per cent to $36.50 while mainland rival China Unicom added 4.73 per cent to close at $9.95.
"Obviously there's still a lot of uncertainty. It's pretty clear that the tide seems to have turned," e2-Capital Securities vice-president of institutional sales Ryan Fong Yen-hwung said.
"Global institutional investors are rerating the [telecommunications] sector and I think we've seen the floor and people are getting back into these names after the sell-off of the past couple of months, especially in China Mobile and China Unicom."
Smaller technology plays were not ignored as investors took advantage of Wednesday's third consecutive rise on the Nasdaq Stock Market and the 8.49 per cent burst of life in the Philadelphia semiconductor index. Semiconductor equipment maker ASM Pacific surged 10.74 per cent to $13.40, while integrated circuit maker QPL jumped 12.06 per cent to $3.25.
"There are signs tech stocks are staging a recovery and, as usual, the first movers are the better managed companies such as ASM and QPL," Phillip Securities research director Louis Wong Wai-kit said.
Noting that the technology sector has been mauled by the Nasdaq fall-out, Mr Fong said the strong performance from the stocks should not have come as a shock for investors.
Away from technology, the talk of the market was in the banking sector as Dao Heng Bank resumed trading after being suspended for four sessions.
It leapt a massive 51.59 per cent to $57 as investors took advantage of the hefty takeover price offered by Singapore's DBS Group.
Dao Heng's parent, Guoco Group, bounded 40.36 per cent to $38.60. The two plays accounted for a hefty 23.36 per cent of turnover and Dao Heng made up 20 per cent of the index's rise.
Speculation was rife as to which company would replace Dao Heng in the Hang Seng Index. Hong Kong Exchanges and Clearing, one of a handful of leading contenders, leapt 5.3 per cent to $13.90.
Investor sentiment was also lifted by the resolution of the diplomatic row between the US and China. As the 24-member crew of the US spy plane made their way to Hawaii, investors sent the red chips 2.8 per cent higher and H shares 1.1 per cent ahead.
This followed news that the mainland's exports rose 14.9 per cent last month over March last year, leading HSBC economist David Seto to conclude "recent market concerns that the yuan will be devalued, due to the sudden fall of the yen, are unwarranted".
The Hong Kong market is closed for the Easter holiday and will reopen on Tuesday.
Email David Wilder at Davidw@scmp.com.
" Success seems to be largely a matter of hanging on after others have let go." ~ William Feather
