Hong Kong's stock market bull run to take a breather
Hong Kong's share price growth is likely to slow after this week's bull run as Chinese bourses close for a week-long holiday next week, dealers said Friday.
By Agencies |
HONG KONG: Hong Kong's share price growth is likely to slow after this week's Bull Run as Chinese bourses close for a week-long holiday next week, dealers said Friday.
The benchmark Hang Seng Index has reached a succession of record highs in the past week, gaining a whopping 5,300 points, or five percent, to end at 27,142.47 on Friday. It soared nearly 25 percent in the third quarter.
Gains on the index were fuelled by the half-a-percent cut in US interest rates mid-September and hopes for fresh fund inflows from the mainland.
But momentum is expected to ease next week with no stimulus from China as the markets will be closed for a week starting October 1.
"Investors will be looking to Wall Street and US economic data for their cues," said Howard Gorges, vice chairman of South China Securities.
"But with the Hong Kong market, things don't always sit with the way one thinks they should, so it is difficult to rule out another record-setting week."
Hong Kong is expected to benefit from the launch of a Chinese government-owned investment company which will focus on investing some of China's 1.4 trillion dollars of foreign currency reserves in overseas markets.
China Investment Co (CIC), which will manage 200 billion US dollars and is expected to be launched on Saturday, already attracted money into the local bourse.
"It is difficult to prove that it is happening but the high liquidity in the market is an indicator," said Castor Pang, strategist at Sun Hung Kai Financial.
Looking forward, Jackson Wong, investment manager at Tanrich Securities, said investors were worried about any monetary tightening policies which might come out next week and during China's 17th party congress next month.
"Investors are waiting to see what monetary measures would come out," he said. "Any negative events would trigger a correction."
The benchmark Hang Seng Index has reached a succession of record highs in the past week, gaining a whopping 5,300 points, or five percent, to end at 27,142.47 on Friday. It soared nearly 25 percent in the third quarter.
Gains on the index were fuelled by the half-a-percent cut in US interest rates mid-September and hopes for fresh fund inflows from the mainland.
But momentum is expected to ease next week with no stimulus from China as the markets will be closed for a week starting October 1.
"Investors will be looking to Wall Street and US economic data for their cues," said Howard Gorges, vice chairman of South China Securities.
"But with the Hong Kong market, things don't always sit with the way one thinks they should, so it is difficult to rule out another record-setting week."
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Hong Kong is expected to benefit from the launch of a Chinese government-owned investment company which will focus on investing some of China's 1.4 trillion dollars of foreign currency reserves in overseas markets.
China Investment Co (CIC), which will manage 200 billion US dollars and is expected to be launched on Saturday, already attracted money into the local bourse.
"It is difficult to prove that it is happening but the high liquidity in the market is an indicator," said Castor Pang, strategist at Sun Hung Kai Financial.
Looking forward, Jackson Wong, investment manager at Tanrich Securities, said investors were worried about any monetary tightening policies which might come out next week and during China's 17th party congress next month.
ADVERTISEMENT
"Investors are waiting to see what monetary measures would come out," he said. "Any negative events would trigger a correction."
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