TVB pictures soft approach in mining the potential for Jade

Even for a stock as volatile as Television Broadcasts, it was unusual. Last Thursday's 5.92 per cent surge was driven by rumours of a breakthrough for the company. Alas, the rumours turned out to be groundless, and the management ended them with a swiftly issued denial.

Hope, it seems, springs eternal for the dominant broadcaster. It certainly seems that way for investors waiting for the company to negotiate a revenue-sharing agreement with Guangdong province's cable-television operators.

The operators have been pulling down the Jade signal, cutting in their own advertising and broadcasting it for more than five years without TVB's permission.

This is not a minor issue. Jade generates about HK$900 million a year in revenue, according to CLSA's Andrew Collier - against TVB's $3.3 billion sales last year - but its owner does not see a red cent.

Rival broadcaster Asia Television surprised the pundits in August when it was given permission by the mainland authorities to broadcast in Guangdong ahead of its larger rival. However, this marked only the beginning of ATV's battle to secure at least some of its advertising revenue, as the approval merely cleared the way for the company to start negotiating with the cable-television operators.

'This kind of thing has been talked about for years but landing rights itself are not that important. To be honest, the most important thing is if they can strike a deal with the cable-TV operators regarding advertising revenues,' GK Goh analyst Charles Law said.