Hong Kong stocks are expected to hug current levels this week ahead of key earnings reports, including results from the city's biggest property developer, Sun Hung Kai, and a batch of new share offerings.
Markets will focus on Financial Secretary Henry Tang's maiden budget on Wednesday, though analysts said they expected little in terms of tackling the government's yawning fiscal deficit, which Tang aims to eliminate by 2008/09.
Dominant fixed-line phone firm PCCW Ltd is tipped to tumble when it resumes trade after saying it was in the advanced stages of selling off its more-than-$1-billion property portfolio. Its shares were suspended on Friday.
PCCW's shares were worth HK $135 at the height of the Internet bubble. They are up 18 percent this year, thanks largely to the strength of the company's residential developments. Investors are less bullish about its core telephone business.
The benchmark Hang Seng Index slid 3.25 percent last week to 13,454.76, retreating from a three-year high hit on Monday. Traders said they expected the index to shuffle between 13,300 and 13,600 points this week.
A weak US dollar, to which the local currency is pegged, makes Hong Kong assets relatively cheap to overseas investors.
Another batch of hot share offerings is likely to suck up funds as investors clamour for exposure to China.
Individual investors can begin applying for shares in top Chinese chip maker Semiconductor Manufacturing International Corp, or SMIC, on Monday.
Institutional investors are piling into the offering, the world's third largest this year, at up to $1.79 billion.
Shares of diesel engine maker Weichai Power Co Ltd are to start trading on Thursday after a popular $148.72 million initial public offering (IPO), the same day as Internet and media firm TOM Online, which raised $194 million.
Both are tipped for first-day gains. Report cards are expected from some Hong Kong blue chips, such as property developer Sun Hung Kai Properties, Swire Pacific, one of Hong Kong's oldest trading firms, and Cathay Pacific Airways Ltd, Asia's second-largest carrier by market value.
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