Newspaper caution urged as price rises lift shares

The decisions by Oriental Daily News and Apple Daily to lift their cover prices should boost sentiment towards the tattered Chinese-language newspaper sector, analysts say, but they warn investors in media stocks to be selective.

Shares in Oriental Daily News parent Oriental Press Group jumped to their highest point in 18 months, rising more than 5 per cent to $3.95 from $3.75. Sing Tao Holdings climbed 2.5 cents to close at $4.47 while Ming Pao Enterprise Corp was unchanged at $3.55.

From today, Oriental Daily News will raise its cover price from $3 to $4, while rival Apple Daily, owned by Jimmy Lai, will abandon its '$4 until the 1997 handover' promise and raise its price to $5 on its June 20 first anniversary.

Lippo Securities analyst Simon Yeung said the cover-price rises, in tandem with an improving advertising outlook, would help revive newspaper industry prospects. Advertising would come from the rebounding property and booming telecoms sectors.

Despite this, Mr Yeung said the industry still had the uncertainty associated with paper prices overhanging it. 'Investors should be selective about media stocks,' he said. 'Of the Chinese media stocks, we recommend buy for recovery at Oriental Press.' Paul Lee, of Vickers Ballas Investment Research, said investors were increasingly favourable towards media stocks thanks to a release of pressure after the price war and improved sentiment.

'The bad news is over,' he said. 'Share prices of media stocks should improve further.' Mr Lee said boosting cover prices should further buoy sentiment towards Oriental Press, Sing Tao, Culturecom Holdings and Ming Pao, all of which have seen a rebound in the past two months.