Stock market turnover hits yearly low
Updated: 2008-06-18 07:22
By Lillian Liu(HK Edition)
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Apparently fearing global inflation and rising commodity prices, Hong Kong investors sat back yesterday and watched the market have its weakest session of the year in terms of trade volume.
Mainboard turnover was just HK$48.26 billion, down from Monday's HK$56.68. The previous record low this year was HK$54.49 on May 27.
And some analysts say the low-trading trend isn't going to get much better for at least a week or two, unless authorities implement market rescue measures.
The benchmark Hang Seng Index changed little yesterday, managing to close up a meager 28.30 points, or 0.12 percent. It had fluctuated between 23,128 and 22,872 before closing at 23.057.99.
And the China Enterprises Index of Hong Kong-listed mainland companies inched up 9.67 points to 12,568.03.
Energy stocks jumped, but airlines fell after crude oil surged to a new record near $140 a barrel overnight, behind speculation that China will increase the prices of refined-oil products before the Olympic Games in August.
Sinopec, Asia's largest oil refiner, closed up nearly 3 percent at HK$7.73, extending Monday's 3.4 percent gain.
Oil producer and refiner PetroChina gained 0.6 percent to HK$10.30, while offshore oil producer CNOOC added 0.3 percent to HK$13.41.
"Sinopec is trading on speculation that the authorities are considering changing the system of pricing refined oil products, which will allow oil companies to sell products at higher prices," said Francis Lun, general manager at Fullbright Securities.
Without a similar encouragement, airline stocks tumbled on fears of surging fuel prices.
Cathay Pacific Airways fell 2.2 percent to HK$15.26. China Southern Airlines, the mainland's largest carrier, slid 2.8 percent to HK$4.87. Air China gave up 2.8 percent to HK$3.87 and China Eastern Airlines lost nearly 3 percent to HK$2.74.
"We are now in the low season, and investors are extremely cautious," said Dick Lee, a corporate officer at Phillip Securities. "Everybody will continue to have a wait-and-see attitude for the next week or two.
"It's bad news for brokerage firms. If the thin volume continues, brokerages might have to reduce their commission fees or offer bargain rates for new share subscriptions to lure customers."
Brokerage shares saw their prices fall as the city's sole bourse, Hong Kong Exchanges and Clearing (HKEx), dropped 0.8 percent to HK$124.90. Taifook Securities slid 1.3 percent to HK$2.99, and Emperor Capital fell 2.6 percent to HK$0.74.
But Lee thinks the market will be active again in July, when Wall Street shows signs of improvement.
Andrew To, sales director at Taifook Securities, said investors will look to Beijing for market stimulation policies while awaiting news from the US.
He said he believes Hong Kong stocks will continue to struggle at the 23,000 level.
(HK Edition 06/18/2008 page2)