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Hong Kong Tycoon Buys Majority Stake in China Entertainment TV - 2003-07-07


Hong Kong's richest man buys a television station, and international direct investment in South Korea plunges over concerns about unfavorable operating conditions.

Tom.com is buying a 64-percent stake in China Entertainment Television from Turner Broadcasting System Asia. Tom.com was founded as an Internet portal by Hong Kong tycoon Li Ka-Shing. It has since diversified into more traditional media, such as outdoor advertising, print media, and now, television.

Tom.com is issuing Turner 21 million new shares of its stock, valued at $0.325 each. It will also take over management and most funding obligations for CETV from Turner. The deal gives Turner an option to buy CETV back in part or in full until the year 2010.

Asia's largest air ticketing and reservation company says the region's travel industry is on track for a full recovery this year. Abacus says travel bookings are returning to 2002 levels, seen prior to the outbreak of Severe Acute Respiratory Syndrome, or SARS.

The SARS outbreak was a severe blow to the tourism industry, leading many airlines to slash routes from their flight schedules. Abacus says there were half-a-million travel bookings within Asia for mid-June. That is a sharp increase from just over 100,000 bookings for the week from March 30 to April 5. Abacus says post-SARS packages and special offers are helping to recapture business lost during the outbreak.

Tony Concil, spokesman for the International Air Transport Association, says that, while this is a positive development, airlines still face some difficulties. "What that means is that you have more passengers. That does not necessarily translate into airline profitability," he says. "Certainly, you've seen a lot of discounting in the market - fares and yields are much lower than they were a year ago. And recovery in the airline industry, which is different from a rebound in traffic, would take an awful lot longer."

The Australian dollar rallied to a five-year high against the U.S. dollar this week, after the country's central bank left interest rates unchanged. As of Wednesday, the Australian dollar was worth $US0.68.

Australian treasurer Peter Costello says bankers probably left interest rates alone, because Australia's economic growth of about three percent is already outpacing that of most other developed nations.

On another note, the Australian government says June was a record month for car and truck sales. For the first time on record, more than 90,000 vehicles were delivered in a single month, in a sign of strong consumer confidence.

The Bank of Korea says international direct investment in South Korea plunged this year. International investors spent $412 million on South Korean production facilities in the first five months. That is barely more than half the $812 million invested in the same period last year.

Korea-based analysts say increasing numbers of South Korean firms are relocating to other Asian countries in search of lower costs. They also say labor militancy and high corporate taxes create an unfavorable atmosphere for doing business.

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