Hong Kong share prices will remain volatile, as investors continue to cower from the market on worries about the health of the US financial sector and economy, dealers said. For the week ending October 3, the benchmark Hang Seng Index dropped 5.4 percent to 17,682.40. The previous week it fell 3.3 percent.
Worries surfaced about exposure of collapsed US banks, lending rates between banks and general liquidity. Howard Gorges, vice Chairman of South China Securities, said the uncertainty would continue.
"(They are all) just something to be worried about, and the market is looking for things to be worried about," said Gorges. "It has been a volatile week and it will be the same next week."
Gorges said the market could head as low as 17,000 if the US does not rally, but a string of negative economic data was providing a barrier to any investing beyond short-term bargain-hunting, a situation that is unlikely to be remedied soon. "The writing on the wall is that the US is about to enter some kind of recession and probably already has," he told AFP.
Gorges said Hong Kong's banking sector was in a strong position and was not suffering from the problem of giving out too many loans, a situation that many companies had avoided.
"Corporates have not been on a blow-out binge," he said. However, turnover remains very light as the market is driven by day-to-day worries and long-term investors have stayed away. "It is impossible to make any prediction, it is so day-to-day. I would not even dare forecast a bounce," he added.