Hutchison Whampoa shares may consolidate after the confirmation yesterday of Deutsche Telekom's purchase of its 23.4 per cent-held VoiceStream Wireless as questions are raised about Hutchison's telecommunications strategy. HSBC Securities conglomerates analyst Carl Wong said shares in Hutchison - which yesterday closed down 3.64 per cent at HK$119 - could trend lower after its recent rally to a closing high of HK$123.50 on Friday. Mr Wong believes the stock provides a buying opportunity from HK$110 per share. Deutsche Telekom will buy United States-based VoiceStream for US$55.7 billion, earning Hutchison US$10.68 billion. 'I think in the near term, there may be some sort of consolidation as there's been major transactions driving it up,' Mr Wong said. 'I think HK$110 to HK$115 would be a good buying opportunity.' Some in the marketplace have questioned the group's telecoms strategy as the much-rumoured VoiceStream deal could confirm the conglomerate's 'asset trading tendency'. Merrill Lynch analyst Christine Leung discussed investor confusion as a potential negative in a Hutchison report, but added that even the downside was not that negative. 'One can argue that it may not be a bad thing to be an asset trader that knows how to maximise shareholders' value by reaping the crop at its best rather than wait until that crop runs the risk of yielding slower growth and returns,' Ms Leung said. According to Mr Wong, any negative vibes would be short-lived. 'Some people are questioning their strategy . . . [but] the uncertainty will be gradually understood by the market,' Mr Wong said. He takes a firm belief Hutchison will make it as a global telecoms player with its third-generation (3G) technology. 'Many people say they are just trading off their assets, but I do think they have a strategy to become a leading 3G operator in developed countries,' Mr Wong said. 'If you don't want to buy into 3G, then you should not invest in Hutchison.' Both HSBC and Merrill rate Hutchison as a buy.
