Asia Satellite Telecommunications' (AsiaSat ) shares
fell sharply on the Hong Kong Stock Exchange following the Christmas holiday, as investors
reacted to the failure of AsiaSat 3 to reach its geostationary orbit on Christmas Day.
On the first day of trading after the holiday,
AsiaSat's shares fell 19 percent from their pre-Christmas price, closing at $HK13.45
($US1.72) apiece. The plunge knocked $US159 million off the company's market
capitalization. However, ING Barings bank in Hong Kong estimated that $US71 million of the
estimated earnings for the current financial year will be lost, or around 42 percent of
Some analysts said the final figure was likely to be less
than one-half that amount. They added that some investors in the Hong Kong bourse were
overreacting to the news because of the current volatility of Asian markets, caused by the
region's economic downturn.
Around 40 percent of AsiaSat 3's capacity was to have
been taken up by customers migrating from AsiaSat 1. Existing AsiaSat 1 customers would
have been transferred from the old bird to the new one, without any changes in their
operating conditions and transponder rentals until 2000. These customers include Chinese
telecommunications companies and provincial TV channels. Star TV's free-to-air
platform is the only panregional service using AsiaSat 1.
AsiaSat deputy CEO Bill Wade said the company had been in
negotiations with potential customers, but 'it is the nature of the business that
they want to see the satellite launched first before committing to it.'
AsiaSat 3, which had 28 C-band and 16 Ku-band transponders,
was the first satellite in the series to be launched on a Russian Proton rocket from the
Baikonur Cosmodrome in the Republic of Kazakhstan. The previous two birds were launched by
Chinese Long March rockets from Xichang, China, in the bleak hinterland of Sichuan
According to AsiaSat CEO Peter Jackson, the fourth stage of
the launch vehicle's second burn cut off prematurely after one second, instead of the
110 seconds that it was programmed to last.