PCCW shares dived 4.95 per cent yesterday as investors punished the company for backtracking from a previous indication it would pay a dividend next year.
Analysts downgraded the company's investment recommendation on disappointment about the dividend policy and concerns about potential acquisitions.
This is despite its annual results being generally in line with analysts' expectations, and significant progress being made in cost cutting, debt reduction and cash management.
The company's shares closed the session 25 HK cents down at HK$4.80.
The telecommunications operator yesterday said it had decided not to pay a dividend next year, citing the increasingly uncertain global political and economic situation, and did not commit to a payout in 2005.
It said its target was to pay a dividend in the medium term, but added its priority was to make progress towards previously announced goals of reducing debt by at least US$1 billion by 2005, and achieving an A rating from Standard & Poor's for fixed-line subsidiary HKTC.
To achieve the rating, HKTC would need to repay US$900 million in debt, it said.
