Hong Kong shares are set for a choppy ride as over-optimistic investors begin to realise that the economy has not yet recovered, dealers said. For the week ending May 15, the benchmark Hang Seng Index closed at 16,790.70, dropping 599.17 points, or 3.45 percent, over the trading week.
Peter Lai, sales director at DBS Vickers, said the market would be driven by news and lacking in direction next week. "The market will swing widely and wildly. It will start to cool down after the recent rallies," he told AFP. "Lots of smart funds are already taking profits since all the economic indicators have shown that the global economy - while not as bad as some had predicted - has yet to recover. It is time to quit." Lai said he believed the market would trade in the range of 15,800-17,200 points. He expected it to hit bottom again in the fourth quarter.
The index "is likely to consolidate in the near term after the recent strong rally of 14 percent since April 28," Kenny Tang, head of research at Redford Securities, told Dow Jones Newswires. But if liquidity remained high, the index might test 18,000 by the end of second quarter, Tang said.