Television Broadcasts (TVB) became the latest company to take advantage of recent gains in its share price to raise funds, tapping the market for $616 million in a share placement yesterday. The firm placed 20.3 million shares at $30.30 each, a discount of 5.01 per cent to Tuesday's closing price of $31.90. Its shares were suspended yesterday. The proceeds from the placement - which was handled by Lehman Brothers - have been earmarked for a $1.6 billion studio being built in Tseung Kwan O. 'It was a very successful placement,' said Lehman Brothers senior vice-president William Bowmer. 'Hong Kong and Europe showed great interest.' He said the reason TVB chose to place shares to finance the new studio was its conservatism. 'They run a very conservative, tight ship and they're looking to keep gearing low,' he said. Some analysts questioned the necessity of TVB going to the market to finance the studio project, which will be completed over the next five years, as the company could finance it from internal reserves. 'Based upon my forecast there was no need for them to raise funds,' said Deutsche Securities analyst Mark Siford. 'With the abolition of royalty tax, some time later this year, they didn't need to raise money.' The company made a profit last year of $480.48 million, a fall of 20 per cent compared with 1997. Other analysts felt TVB should have borrowed from the bank rather than diluting its shareholder base and lowering the value of the stock. 'Doing some bank borrowing would be good for the shareholders as it would improve their return,' said one analyst. Yet analysts thought the stock price would only be slightly affected in the short term by the placement as it amounted to just 4.8 per cent of the company's shares. TVB is more likely to be in for a short downward correction after its 35 per cent gain since the Lunar New Year. 'The share price could come down to $27-$28, not because of the placement but because of the overall market,' said one analyst at an Asian brokerage. One brokerage recently changed its recommendation to hold from buy with a 12 month target-price of $32 due to the strength of the stock's recent gains. Mr Siford was more bullish on the company as Hong Kong appeared to be on the verge of recovery and revenues from mainland and Taiwanese ventures continued to grow. The brokerage has a 12-month target of $40 for TVB.