HONGKONG Electric generates and supplies electricity to Hong Kong Island and is engaged in engineering consulting and project management. Brokerage ING Baring Securities has put a buy on the stock, saying it remains the preferred energy utility play in the Hong Kong stock market. Hongkong Electric's financial position and earnings outlook largely are unaffected by the problems facing other Asian energy utilities as its earnings are protected by the Hong Kong dollar peg and by its regulated Scheme of Control earnings. The peg protects Hongkong Electric from possible foreign exchange translation losses arising from purchases of fuel and equipment. The Scheme of Control means that should the peg be broken, any implied translation losses would be passed through to the end-user. Demand growth from 1998 and 2002 should be more than 5 per cent due to Hongkong Electric's growing services and increased property and infrastructure development. It has prospects of upward earnings revisions over the next 12 months due to its expansion in the mainland. The high dividend yield for the stock - at the higher end of the seven-year average of 4.04 per cent to 5.8 per cent - should provide strong support for any share price weakness.