HONGKONG STOCK MARKET, June 20-24, 1988
These renewed fears of interest rate hikes came in the
wake of very positive sentiment following the release, the previous week, of the US trade deficit figure, which was much lower than expected.
Analysts said that the threats of inflation had checked what was anticipated to be a minor bull run, but added that Market confidence should be restored once the initial
Market reaction had subsided.
The figures for the US Consumer Price Index for the month of May were due to be announced after the Mar- ket had closed, and analysts were watching carefully for further signs of possible inflation.
They said that if the figures indicated more than the calculated 0.5-percent rise in consumer prices, the proba- bility of inflation would increase.
In the event, the US Government announced that the May consumer prices had increased by only 0.3 percent, alleviating some inflation fears.
The Hang Seng Index, closed at 2,683.65, having fallen 35.41 points in a day of profit-taking by both local and overseas investors.
The Hongkong Index closed on its day's low at 1,777.03, down 23.64 points.
Turnover was $HK413.02 million lower than the previ- ous days, at $HK1.33 billion, reflecting a day dominated by sellers anxious to unload their holdings.
The Property Sector felt the tremors caused by The Hongkong and Shanghai Banking Corporation's report which suggested that the property market was not as solid as it might have appeared.
Of the Sub-Indices, the Property Sector registered the greatest decline by falling more than 73 points to 4,075.24.
In a seminar held by The Hongkong Stockbrokers As- sociation, brokers rejected most of the major changes rec- ommended for the restructuring of the Hongkong Stock Exchange by the Securities Review Committee.
The Association was reported to have unanimously ob- jected to the recommendation that the Stock Exchange be changed into a non-profit outfit.
The committee also considered that any dissociation of the new body from the Government would be inappropri- ate on the grounds that investors would 'feel more com-
fortable' if the regulatory body was under the watchful eye
of the Government.
In addition, the Association said that the Securities Review Committee's proposal, that the settlement period should be extended from 24 hours to 3 days, would be impractical in Hongkong.
Corporate news included the purchase of the US- based Omni Hotels Group by The Wharf (Holdings) Ltd and World International (Holdings) Ltd for a little more than $HK1 billion.
Asia Commercial Company Ltd, the watch manufac- turer, announced an After-Tax Profit of $HK55 million for the Year ended March 31, which is an increase of about 124 percent over the previous Year.
The company also announced plans to expand its pro- duction facilities by setting up new factory lines in Hongkong and the development of a factory in Guang- dong.
Orient Overseas Holdings Ltd agreed to sell its insur- ance and off-shore drilling subsidiaries to China Mer- chants Investments Hongkong Ltd for $HK429.4 million.
In Tokyo, the Nikkei Stock Average dropped 215.13 points to close at 27,925.57.
A number of brokers said that the Japanese Market was relatively unstable following its recent record gains, whereas others said that the Nikkei Stock Average might recover during the rest of the week as many Japanese punters saw Tokyo as a 'safe-house' during world equity markets purges caused by, inflation fears and the like.
In New World Tower, the spot month remained in good shape at a premium of 19 points over the Hang Seng Index, although June's index had fallen 26 points to 2,702.
Both the month of July and the month of August dropped 33 points to rest at 2,710.
Major news included:
(a) France and Ireland were permitted by the European Commission to suspend the importation of 3 types of garments exported from Hongkong that entered the countries through other member-nations of the Euro- pean Community;
(b) Oil prices fell to a 3-month low following a 40-(US)-
- 65
No comments yet.
Private notes are available after approval.