Investors flocked to PCCW and iCable Communications in trading yesterday, boosting the two companies' shares after their success in obtaining new free-to-air television licences.
Hong Kong Television Network, in contrast, saw its shares get hammered as the firm returned empty-handed from its four-year quest to compete in the industry long dominated by TVB.
Shares of PCCW, the media and telecommunications giant controlled by Richard Li Tzar-kai, rose 4.6 per cent to close at HK$3.64, which they last reached on June 4. A Barclays report said: "A free-to-air television licence … will open up another revenue stream for PCCW." It expected PCCW affiliate HK Entertainment Television Company to complement the operations of leading pay-TV service Now TV.
But it was iCable that posted the most impressive gains yesterday. Its shares surged 155.32 per cent to finish at HK$1.20 - the stock's highest close since it recorded HK$1.23 on June 14, 2010.
iCable affiliate Fantastic Television plans to invest more than HK$1 billion in the first six years of its free-to-air TV operations.
Over at HKTV, shares fell 33.88 per cent to close at HK$2.03. It was a different story on Tuesday, when the company's shares climbed 28.45 per cent to finish at HK$3.07 just before the government announced its decision on the licencees.
VC Brokerage director Louis Tse Ming-kwong said: "People who bought the stock on Tuesday wanted to recover whatever money they could raise."
Shares in TVB, the city's free-to-air TV market leader, were not affected by the news of more competition. They advanced 0.31 per cent to close at HK$48.80.
Barclays said the results of the government's licensing exercise were "positive for TVB". "We think concerns about TVB's market and revenue share losses should scale back on this announcement," Barclays said.
It pointed out that HKTV "has been actively building content and came with the most aggressive intentions of the three [free-to-air TV licence] bidders". With HKTV out as a competitor, "TVB's wage cost and talent-retention pressures" would be alleviated, it said.