Hong Kong, India hit hard as stocks plummet
HONG KONG — Shares of media and entertainment companies in Asia received a pounding Monday, with those in Hong Kong and India hardest hit, as the progress through Congress of the U.S.’ $700 billion rescue plan failed to impress.Shares in Hong Kong’s largest media company, PCCW, fell 11% to a five-year low of HK$3.07 (40¢) compared with the wider Hang Seng index, which was off by 4.3% to a two-year low of 17,880. Markets across the Asia-Pacific region fell Monday, with the exception of New Zealand, which was little changed, and Taiwan, which was closed following Sunday’s powerful typhoon. Japanese stocks saw relatively gentle trading compared with Hong Kong and India. The wide Topix index dropped by 1.7%, but Japan’s movie majors Toho and Shochiku managed small gains. Sony and Toei slipped less than 1%. PCCW’s share performance reflected concern over the proposed $2 billion private equity buyout of its media interests. Fears are that large, leveraged buyouts of this kind will be blown off track or become impossible if banks are unwilling to lend to buyers. Contrarily, Shaw Bros., which is the controlling shareholder of broadcaster TVB, which is on the block, recorded a drop in line with the market, at 4.1%. TVB itself dropped only 1.9%. Last week Shaw confirmed that it has again had talks concerning the sale of its TVB stake. Among other Hong Kong stocks, animation house Imagi was down 32% in a brief morning trading session before its shares were suspended, pending a “price sensitive announcement.” Esun, parent of Media Asia, survived the company’s half-year trading statement, which showed a shift from profit into loss. The shares dropped 3.3%. The Indian entertainment sector suffered the most. The Bombay index sagged 3.9%, but there was particular bloodletting among media shares, led by exhibitors. There were double-digit losses for Adlabs, Fame and Pyramid Saimira. PVR and Inox were not much further behind, with 8% losses. Negative sentiment flowed from last week’s announcement by Pyramid that it will cut back on exhibition and distribution in Northern India, where profits are hard to come by. But there were other casualties. Video distrib Saregama was 13% lower, and mini-conglom Mukta Arts lost 11%. Most of the London-traded Indian firms were not exempted. Indian Film Co. and UTV Motion Pictures were both down 6%, and toon house DQ had shed 4.5% by midday. Bucking the trend, however, was London-traded Eros Intl., up 2.9%, and Bombay-traded TV producer Balaji Telefilms, up 2%.