Hong Kong Stock Exchange In The Doldrums
Afflicted by tumbling stock exchanges around the world, poor local economic
conditions and a bombed-out property sector, Hong Kong's benchmark share index
touched a 12-month low yesterday, although ending slightly off the bottom after
a technical rebound. The index ended up 0.30 per cent or 29.65 points at 9,820.33,
after an eight-day losing streak. Market turnover was low at HK$5.9 billion
(US$757 million). Property shares have performed badly for months, as deflation and lack of growth
have driven real estate prices to a level 60% below their 1997 peak, while investors
sold PCCW down to its lowest level since its purchase of Hong Kong Telecom two
years ago, ahead of its expected interim loss due to be announced today. Market sentiment wasn't helped either by brokerages advising clients to sell
out of Bank of China Hong Kong, whose IPO successfully raised US$2.5bn just
last month. The brokers have just been released from a 40-day post-IPO purdah.
Poor conditions in the stock market and low future expectations were reflected
in the most recent sale of a stock exchange trading right which took place yesterday
at just HK$1.5m, barely half of the ruling price just a year ago. For the three months to June, the stock market's average daily turnover was
HK$8.2 billion, compared with HK$10.8 billion in the same quarter last year.
The average daily turnover has further shrunk to about HK$4.5 billion in recent
weeks. .
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