Despite the recent volatility, the Hong Kong market has had a good run this year with the benchmark Hang Seng Index up 45% and many investors are sitting on sizeable gains, making a partial sell-down a tempting option amid the increasing uncertainty about the outlook for next year.
Last week, Temasek Holdings reduced its stake in three Hong Kong-listed companies through separate block trades, raising in a combined $1.1 billion.
There was no information about the identity of last nightÆs seller, but sources say it will not hold any more shares in the Chinese mobile operator after the deal. The block accounted for just under 1% of the existing share capital and about seven days worth of trading volume.
The deal comprised 150 million shares that were offered at a price ranging from HK$16 to HK$16.20. The final price was fixed in the middle at HK$16.10 for a discount of 5.2% to yesterdayÆs close of HK$16.98. The stock had a spectacular run last week when it added 25.9%, but a 7.9% drop on Monday erased some of that. Still, the share price is trading within $2 of its record closing high of HK$18.80 from October 30.
According to one source, the JPMorgan-led deal was covered within one hour of the launch but the books were kept open to 8.45pm Hong Kong time to give more players a chance to participate. In the end, about 30 investors came into the deal. Most of them were from Asia or Europe, which isnÆt surprising given that the offer closed before most US investors made it to work. Based on the size of the allocations, it seems the deal was between 1.5 and two times covered.
The buying interest may have been underpinned by reports yesterday that Unicom is in talks with PCCW to offer third generation roaming services in Hong Kong. PCCW recently obtained a license to offer 3G services based on the CDMA2000 standard. This would suit Unicom, which provides mobile services in the Mainland based on the 2G CDMA standard.
Separately, Bloomberg reported that Unicom is planning to expand its existing network to cover the entire country by early next year and to lift the number of cities covered by its high-speed GPRS service to 300 from 200 today. Whether directly related or not, the share price gained 1.9% yesterday, compared with a 0.8% rise in the HSI index.
UnicomÆs third-quarter profit more than doubled from a year earlier to Rmb2.98 billion ($403 million), as it used reduced rates to attract more customers.
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