Hong Kong stocks are set to trade narrowly as investors prefer to stay on the sidelines in face of scant economic news at the year end, dealers said. For the week ending December 26, the benchmark Hang Seng Index closed at 14,184.14, dropping 943.37 points or 6.24 percent over the week. The market was closed on December 25-26 for Christmas.
Market analysts expected the turnover to remain low in the remaining sessions of the year. "Investors are likely to be on the sidelines from now until the end of this year in face of scant economic news," YK Chan, a fund manager at Phillip Securities, told Dow Jones Newswires.
"There aren't many outstanding issues," he said. Peter Lai, sales director of DBS Vickers, said he believed the market would not see the typical year-end rally. "The market normally goes up at the end of the year. But I think it will go down this time," he told AFP.
Lai said fund managers would not bother doing any window dressing, a strategy they typically used at year end to improve the appearance of the portfolio for their clients by selling underperforming stocks and purchasing high-flying ones. "Everybody knows the market has been badly hit by the credit crunch and the global recession anyway. There is no point in pretending," he said.
Lai expected trading to fall within the range of 13,200 to 14,500 points next week. He warned the market had not yet tested the bottom. "I expect the market to be testing the bottom in 2009-2010. On the whole, I am pessimistic about next year," he said.