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SCMP Reporter

SUN Hung Kai Properties has won the Business Post Hang Seng Index blue chip survey for the third year running, dominating constituent counterparts for quality of management, regard for minority investors and quality as a long term investment.

  HSBC Holdings came top for best disclosure and Hang Seng Bank won the most financially sound poll.

  The survey asked 34 broker research heads to rank Hang Seng Index constituents from one to 10 over the five test categories.

   One was the worst score. Each figure in the table for each category represents the average of the 21 returns faxed and posted back.

   The number under the overall rankings should be viewed knowing that 50 points was the best possible score and five the worst. The survey was carried out over six weeks in June and July.

  The survey, now in its fourth year, showed Hong Kong blue chips were better regarded than they were in 1991.

  The median for overall rankings in that year was 34.9 points, with the highest points scored by Dairy Farm with 40.72. This year, the median was 35.15 points and the highest score was 44.32.

  Some of the biggest changes were in financial soundness rankings and disclosure, both of which saw major leaps up the rankings by HSBC.

  Another major gainer this year is Wheelock and Co. The improvement can be put down to the 'John Hung effect'.

   As an executive director at Wharf, his aggressive marketing of that group - beginning in 1990 - transformed the image of this once sleepy backwater of a company in the eyes of equity analysts.

  He moved to Wheelock last year and his concept stock style promotion pushed the company's rating into the top 10.

   Wharf maintained its rank by ensuring a high degree of access and disclosure relating to figures was available to analysts and investors.

  The transformed image at HSBC could be attributed to the hard work of the top management, who had taken the group from being seen as a poorly-managed colonial style banking corporation into one of the top 10 banks in the world in terms of size.

  In 1991, the group's overseas operations were haemorrhaging. It was still getting over the embarrassment of the close association with disgraced business tycoon Alan Bond, and the much vaunted merger with Midland Bank was on hold.

  Since then, the takeover of Midland was completed, the overseas subsidiaries were turned around and, with Sir William Purves as chairman and the strong hand of John Bond as chief executive, HSBC was now better regarded for its management quality.

  CITIC Pacific, the mainland's key investment vehicle on the exchange, had improved its ranking status since it was included in the index in 1992.

   The group gained a reputation for steady management, positive earnings outlook and good regard for minorities. Analysts were unhappy about the level of disclosure at the group.

  The fallen-from-grace school of stocks - those which experienced major slumps in their ratings - include the Jardine group.

  Jardine Matheson - group parent - fell from 19th place to 26th, making it the first time it has slipped on to the index trash rankings of positions 25 to 33.

  Jardine Strategic fell to 28th place from 23rd.

  The relative fall from grace comes at a time when these two stocks are due to leave the index.

   Hongkong Land also suffered a slump from ninth to 16th.

  Although these stocks are not due to be included in the Hang Seng Index this time next year, the Business Post is proposing to keep them in its survey on a trial basis.

  The fall in the group company rankings is mainly because of poor ratings under regard for minorities.

  This might indicate Dairy Farm and Mandarin Oriental are to slump in the rankings, should they announce de-listing plans this week.

  Hopewell Holdings has seen a further fall from grace as analysts wait for strong recurrent earnings flow to come from the much-vaunted road and power projects at the group.

  Hutchison Whampoa saw a relative rehabilitation after the company and Cheung Kong plunged in 1992 on the controversy surrounding covered warrants by group chairman Li Ka-shing on the shares of Cheung Kong and Hutchison.

  Hutchison was up from 30th place to 24th. Cheung Kong, however, remained in the doldrums in 27th place, unchanged on last year.



Sun Hung Kai tops survey