STOCKWATCH: First Pacific higher ahead of results; profit decline factored in

HONG KONG (AFX-ASIA) - First Pacific Co was higher ahead of its 2000 results this afternoon, with an expected weak 2000 performance already factored into the company's stock price, dealers said. However, they said concerns remain in place that political instability in the company's main Southeast Asian markets will further affect profitability in 2001, adding that the current gains have little to dowith fundamentals. At 11:42 am, First Pacific rose 0.05 hkd or 2.22 pct to 2.30 on trade of 3.14 mln shares, while the Hang Seng Index was up 35.32 points at 14,001.75 on turnover of 4.75 mln shares. Patrick Pong, an analyst with South China Securities, said he expects First Pacific to report about 530 mln hkd in net profit in 2000, down 51 pct from a year earlier. "A decline is widely expected. The currentgains fail to reflect the (projected) poor results," Pong said. Pong said the fall in profit is due mainly to foreign exchange losses in the Philippines and Indonesia. "I expect First Pacific will incur about 100 mln usd in foreign exchange losses," Pong said. Pong said political instability in the Philippines and Indonesia is likely to continue affecting units PLDT and Indofood. "However, we still recommend a 'buy' on the stock on its low valuation. We expect net asset value to go up to 3.20 hkd per share in 12 months," Pong said. However, Core Pacific Yamaichi International analyst Arthur Law said he maintains a 'sell' recommendation on First Pacific.

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