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  • Feb 28th, 2005
  • Comments Off on Hong Kong investors look to HSBC, property for market direction
Hong Kong share prices are expected to continue firmer this week but much will depend on a series of upcoming annual results, chief among them from global banking giant HSBC, dealers said. They said the market has had a good run over the past two weeks and so the results from HSBC and other majors will have to live up to forecasts or investors could sell off to take their profits quickly.

At the same time, concerns over the outlook for interest rates will remain in the picture given that Hong Kong banks have not increased lending costs to match the hikes in the United States, which in theory they should follow due to the territory's pegged currency system.

For the week to February 25, the Hang Seng Index rose 69.22 points or 0.5 percent to close at 14,157.09.

"Investors will be looking to two things: corporate earnings and interest rates," Eric Yuen, head of research at Dao Heng Securities told AFP. "Hong Kong's prime lending rate hasn't changed for some time even though the US rate has gone up - we expect some movement ahead of the next US Fed meeting," Yuen added.

Yuen said the market was trading at a premium, an indication that investors were expecting positive news from HSBC, which announces its full-year earnings for 2004 on Monday.

Investors will also be seeking guidance in the results due from a number of property giants, including the city's largest developer Sun Hung Kai Properties as well as subway operator MTRC, which has a huge property portfolio.

Giving hope for the property sector is the expected release of the government's list of land available for development.

"If it is released this week, that will boost sentiment," said Yuen.

He expects the market to test technical resistance levels of 14,300 and possibly even 14,600, depending on how good the banking and property corporate results are.

Copyright Agence France-Presse, 2005


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