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HK stocks end sharply higher on telecoms

HONG KONG: Hong Kong stocks had their highest percentage jump on Thursday since last July after telecoms shares surged on the Nasdaq's record rise.

The benchmark Hang Seng Index soared 4.16 percent or 681.87 points to close at 17,058.66.

This was the biggest percentage gain since July 2 last year, when the Hang Seng rose 4.82 percent, and puts the benchmark index back into positive territory for this year.Investors flocked into "new economy" stocks of technology and telecoms after the Nasdaq posted its largest one-day point gain, jumping 168.21 points or 3.84 percent to a record 4,550.33 on Wednesday.

"The Nasdaq and Hong Kong market move in tandem," said Ian Wenham, head of Asian Equity Research at Lehman Brothers. "Anything to do with Internet and telecom is where the action is."

With Hong Kong's currrency pegged to the US dollar, any move on the Nasdaq has a big effect, said Richard Ferguson, telecom analyst with Nomura International.

US Federal Reserve Chairman Alan Greenspan on Wednesday reiterated that the US economy is growing too fast, but gave assurances that the Fed was not in the business of determining the appropriate level of stock prices. China Telecom (Hong Kong) Ltd led the surge and was the most actively traded stock, vaulting 9.09 percent or HK$5.50 to HK$66.00 and making up just under half of the Hang Seng's gain, according to Reuters 3000.

Blue chip telecom shares were also propelled higher by investor expectation that a deal between Cable & Wireless and Pacific Century CyberWorks (PCCW) might happen soon, said Steven Leung, senior vice president of sales at Daiwa Securities.

Hong Kong's No. 1 telecoms carrier has fallen for the past three days as investors awaited developments in its potential merger with PCCW, which is Asia's largest Internet firm outside Japan.

jumped 5.04 percent or HK$1.20 to HK$25.00.

PCCW ended higher for the first time this week, climbing 3.56 percent or HK$0.75 to HK$21.80. Conglomerate Hutchison Whampoa Ltd, which has ties to the telecoms sector with its stake in Mannesmann AG, jumped 5.0 percent or HK$6.00 to HK$126.00.

Investor frenzy over Internet portal tom.com Ltd's initial public offering helped boost Hutchison and its property parent Cheung Kong (Holdings) Ltd and for high-tech stocks across the board, analysts said.

Hutchison and Cheung Kong together own 57 percent of tom.com.

Enthusiasm for tom.com was seen emulating the mania over red chips in 1997, when Beijing Enterprises Holdings Ltd's in May set a record of being 1,200 times subscribed.

Cheung Kong finished the day up HK$3.00 to HK$107.00. On the coattails of the Nasdaq-inspired rebound was television programmer Television Broadcasts Ltd (TVB) and Sun Hung Kai Properties Ltd.

The property developer surged 6.6 percent or HK$4.50 to HK$72.75. It announced that it would launch a new web service with 18 banks to provide a one-stop-shop for consumer banking services on the Internet, to be called Bankingstreet.net.

Blue chip surged 8.0 percent or HK$5.25 to HK$70.25 after gaining 22.92 percent in the past month, when media stocks have become hot property following the merger of America Online and Time Warner Inc in January.-Reuters