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Hutchison declines after announcement

Shares in Hutchison Whampoa slumped yesterday after the company said it will inject ?650 million (US$1 billion) into its British third-generation mobile communications unit Hutchison 3G UK, dealers said.

Shares of Hong Kong-based Hutchison, controlled by Asia's richest tycoon Li Ka-shing, were down HK$1.90 or 4.26 percent, at HK$42.70 at the end of morning trade yesterday.

Hutchison 3G UK is 65-percent owned by Hutchison Whampoa.

Dealers said the stock's decline reflects continuing concerns over further funding for the 3G business amid increasing doubts that the investment will pay off.

They said the response of partner shareholders Japan's NTT Docomo and Dutch telecoms giant Royal KPN NV, which hold 20 percent and 15 percent respectively of Hutchison 3G UK, to the funding call, will be an indication of how confident they are in the company's prospects.

The fund call is being overshadowed by the wider concerns about the 3G mobile market.

Universal mobile telecommunications system (UMTS), commonly known as 3G, offers high-speed Internet access, advanced games and the ability to send and receive color photos and video clips.

Daiwa Institute of Research analyst Jonas Kan said Hutchison Whampoa could finance the investment, even if it had to take up the rest of the funding if NTT Docomo and KPN did not take part.
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