CORRECTION Hong Kong shares outlook - Lower as investors lock in profits

CORRECTION Hong Kong shares outlook - Lower as investors lock in profits

	Published : Tue, 30 Oct 2007 02:35 By : Agencies Print this Story

HONG KONG (Thomson Financial) - Hong Kong shares may open lower Tuesday as investors will llikely lock in profits after the Hang Seng Index hit record highs in recent sessions.

Investors may also turn cautious after Sun Hung Kai Properties, the biggest developer in Hong Kong, move to sell 72.5 million shares priced at 150.20 to 153.50 Hong Kong dollars, raising as much as 11.1 billion.

'This morning, the Hong Kong market may have a milder correction after the recent rally,' said Daniel Chan, senior investment strategist at DBS Bank.

The Hang Seng Index on Monday closed up 1,181.68 points or 4 percent at a record 31,586.90. It hit a record high of 31,604.50 during the day.

'The deal has important implications for the soaring Hong Kong stock market, because normally when big Hong Kong property developers tap the market for funds it means the market is approaching or is at its peak,' according to IFR Asia, a unit of Thomson Financial.

Limiting the losses are expectations the US Federal Reserve will cut interst rates this week, the ocntinued rally in Wall Street and higher earnings from companies, Chan said.

The Fed on Sept 18 cut interest ratest by a deep 50 basis points, sparking a rally in global stock markets including Hong Kong. Analysts expect the Fed to cut rates by another 25 basis points Wednesday.

Optimism that Chinese investors will be allowed to trade Hong Kong stocks are also pushing the market higher in recent months.

Stocks to watch include Sun Hung Kai, PetroChina, China Life Insurance, Aluminum Corp of China (Chalco) and China Petroleum & Chemical Corp or Sinopec.

PetroChina said it priced its initial public offering of 4 billion A-shares in Shanghai at 16.70 yuan a share, the top end of its target range, helping the company raise 66.8 billion yuan and making it China's biggest IPO so far.

Asia's biggest oil company said the offer size and price were determined 'based on various considerations, such as the offline indicative demand for A-share issue, the prevailing market conditions and the company's funding requirements,' according to a statement it filed late Monday with the Hong Kong stock exchange.

Hong Kong-listed China Life, the mainland's biggest insurer, said its third-quarter net profit was 7.8 billion yuan, supported by higher investment income.

For the first nine months its net profit was 24.7 billion yuan, China Life said in a statement to the Hong Kong stock exchange Monday. It gave no comparative figures.

Sinopec, Asia's biggest oil refiner, said Tuesday that third quarter net profit rose 8 percent to 13.8 billion yuan as higher oil prices and faster growth in China lifted revenue.

Chalco, the nation's biggest metal producer, said third quarter net profit totaled 2 billion yuan. In the first nine months of the year, net profit was 8.4 billion yuan, Chalco said in a statement to the Hong Kong stock exchange late Monday. It didn't provide comparative year ago figures and other details.

(1 US dollar = 7.80 Hong Kong dollars, 7.47 yuan)

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