PCCW shares reversed a fraction of their recent falls on Thursday after chairman Richard Li Tzar-kai said the company hoped to pay a dividend in 2004. Shares in the telecommunications carrier rose 1.09 per cent to close at 92 HK cents after falling 17.11 per cent since the beginning of the month. The shares dipped to an intra-day, all-time low of 88 HK cents yesterday before staging a rebound of nearly 4.4 per cent. In an effort to enhance investor confidence in PCCW, Mr Li said on Wednesday the company would aim to pay a dividend as debt and staff costs fell. 'We would be considering a dividend level of somewhere between 3.5 per cent and 4.5 per cent,' Mr Li told Bloomberg. If realised, the dividend would be the first since Mr Li took over former monopoly Cable & Wireless HKT in August 2000. HKT declared a full-year dividend of 83.6 HK cents, or a yield of about 5.5 per cent, when it announced the payout on May 4, 2000. Since the takeover PCCW has become the worst-performing Hang Seng Index stock, down 57.21 per cent so far this year and 94 per cent from its record high. The market has been speculating that PCCW could be removed from the HSI because of the share price collapse, but Mr Li told Bloomberg that he had not been approached by HSI Services, which decides index constituents. Analysts reacted mildly to Mr Li's dividend pledge. ABN Amro's Joe Locke said: 'While an indication of willingness to pay a reasonable yield is certainly positive, this may not be reflected in the price as such payment is likely to be over 24 months away.' A European analyst added: 'I don't believe there will be funds chasing PCCW because of a dividend. Investors are backing off not because of companies, but because of the market.' In a report to clients yesterday, Merrill Lynch said PCCW would focus on debt reduction until 2004. 'The company's comments [yesterday] are consistent with creditor expectations and it is reassuring that the company has not decided to bring forward dividend payments,' it said. A wild card to PCCW earnings prospects comes from its involvement in the Cyberport project, to which it committed HK$2.6 billion for construction. The company will launch 544 residential units in the first phase and the project will be complete by 2007. Mr Li rejected market speculation as to whether PCCW would be able to achieve capital returns on Cyberport. 'Your sales become your cash flow. The misconception is that if we sell something at a loss, we don't get money coming back,' he said. 'We get lots of money from Cyberport. The issue is how quickly we'll get the money back, what profit we get or do we get a small loss.' Mr Locke said this was the first time that Mr Li had suggested that Cyberport might not break even. 'The market has had its doubts that the project will manage to break even, given the lack of promising signs for a recovery in the Hong Kong real estate market, but the company has insisted all along that profitability was achievable,' he said.