Hong Kong shares may go on way to recovery

03 Nov, 2008

Hong Kong share prices are set to go through a slow but gradual recovery next week, as investors regain confidence after days of rollercoaster trading, dealers said. For the week ending October 31, the benchmark Hang Seng Index was up 10.7 percent, or 1,350.29 points, to 13,968.67. For three days of the week, the index saw a surge or plunge of more than 1,500 points within one day.
"We have weathered the storm," Francis Lun, general manager of Fulbright Securities, told AFP. "I think the volatility will be narrowed next week. Of course, at least one or two years will be required for long-term recovery."
He said that investors would have by now realised that the selling of shares driven by fears of a global recession and negative corporate outlooks over the past few days was "a bit overdone".
The US election next week was unlikely to have any impact on the market as everyone had long expected Barack Obama to win, he said. "The result is a foregone conclusion."
But the analyst said the central banks "have done all they could do" to save the market this week, including lowering rates. Lun expected to see a trading range of 13,000 to 15,000 points next week, and advised investors to buy if they were waiting for a good time to re-enter the market.
"I do believe the rebound hasn't come to an end yet because interest rate cuts will continue world-wide over the next few weeks," said Andrew To, sales director of Tai Fook Securities.
But To remains cautious ahead of the release of key economic indicators in the US and Asia over the next few weeks. "After the technical rebound, the market may come down again to reach the previous low. Hopefully 10,600 might be the bottom unless there is more fresh negative news to come," he said.

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