Hong Kong shares outlook - Higher on Wall Street lead, bargain-hunting

Hong Kong shares outlook - Higher on Wall Street lead, bargain-hunting

	Published : Mon, 19 Nov 2007 02:18 By : Agencies Print this Story

HONG KONG (Thomson Financial) - Hong Kong shares may open higher Monday following Wall Street's gains on Friday and bargain hunting after recent declines.

'There will be some buying support today after the market fell sharply last week,' said Francis Lun, general manager at Fulbright Securities.

The Hang Seng Index fell 1,136.78 points or 4 percent at 27,614.43 on Friday, bringing the weekly loss to 4.1 percent.

It was the second straight week of decline by the index, after it lost 5.5 percent the previous week.

'The US market stabilized last Friday so the Hong Kong market will rise today,' said Michael Chen, vice president for research at CSC Securities HK Ltd.

For the week ahead, the market is likely to remain volatile with some investors sidelined by China's recent crackdown on the flow of illegal funds being used to buy Hong Kong stocks and the limit imposed on cash withdrawals on its citizens.

Speculation that China may raise interest rates for the sixth time this year to cool its economy may also keep investors from buying shares.

Stocks to watch include Industrial and Commercial Bank of China (ICBC), China Shenhua Energy, China Netcom Group and China Telecom Corp.

In corporate news, ICBC, Bank of China and China Construction Bank are eyeing Temasek Holdings' stake of over 17 percent in Standard Chartered Bank, the Financial Times newspaper reported on Monday citing unnamed sources.

Meanwhile, China Shenhua Energy, the nation's biggest coal producer, is holding discussions about joining a coking coal project in Mongolia, the South China Morning Post reported on Monday.

China Telecom Corp, the mainland's biggest fixed-line operator, may also be in the spotlight after a state media report said the Chinese government will soon allow its fixed-line telecom operators to enter the mobile market.

In the same sector, China Netcom, the country's second largest fixed-line telephone company, is planning to invest up to 15 billion yuan starting next year to upgrade its cable network, according to the Economic Observer.

(1 US dollar = 7.80 Hong Kong dollars, 7.43 yuan)

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