Hong Kong's roaring stock market will calm, but fundamentals remain strong and the benchmark index will see more trading above the 30,000-point mark, dealers said.
The market has enjoyed an upward surge of more than 40 percent since the latter part of August when China announced its intention to allow mainland retail investors to put cash into the Hong Kong market for the first time.
The momentum carried the benchmark Hang Seng index through the 30,000 point barrier for the first time Thursday, before it quickly fell back ending the week at 29,465.05, a gain of 2.17 percent on the week. The market was closed for a public holiday Friday.
"I think the market will see a reasonable climb again this week," said Francis Lun, general manager at Fulbright Securities.
"Last week was another roller coaster ride, but it showed that the market really has support."
He said that even when there were sharp falls in prices, as there were on several occasions recently, it was always buoyed by investors looking for bargains.
Lun pointed out that as long as firms continue to post glittering figures, as many mainland companies listed here have continued to do, the market will be backed. "It jumped much too high when it quickly crossed 30,000 points, we do not think that was really trust worthy, but this week you will see a more realistic climb," he said.
However, in a report released Thursday, Morgan Stanley suggested the Hong Kong bourse may be heading towards a bubble and that there was a 30 percent probability of the main index correcting to the 24,000 point level in the next three months.
The report noted that the market has hit valuations of 22 times earnings only four times in the past 22 years, and on four occasions, it fell more than 30 percent in the following 12 months.