HONG KONG: CAUTIOUS STOCK MARKET RECOVERY CONTINUES
(4 Nov 1997) English/Nat Most Asian markets continued their recovery on Tuesday from last week's turmoil, but Hong Kong investors seemed reluctant to let prices rebound too high. The Hong Kong stock exchange rose in early trading for the second straight day but ended the day off more than four per cent. The blue-chip Hang Seng closed the day at 10,780.78, down 474.33 or 4.21 per cent. But in general, Asian sentiment was buoyed by news that the New York stock exchange made its third-biggest point gain ever on Monday. Within the first fifteen minutes the Hang Seng index climbed almost three per cent, adding almost three hundred points and putting the market solidly over 11-thousand. But it slowed in late morning trading and ended the day down more than four per cent. The early buoyant mood followed an overnight rally in New York where the Dow Jones jumped over 200 points Monday, its third-biggest point gain ever. China-related stocks were seen leading the way, in part because they were heavily oversold during the market plunge. But exterior factors got most of the credit for Tuesday's early movement. SOUNDBITE: (English) "Part of the reason is due to strong rally in the U-S overnight, and the second reason is the strong rebound for Asian currencies yesterday after I-M-F put together a rescue package for Indonesia." SUPER CAPTION: Frederick Tsang, BNP Primeast Securities There could still be surprises in store for world markets. Both the Hang Seng and the Dow Jones indexes rose dramatically during the first three quarters of 1997. A new crash could occur in the next two months, although most experts think it won't be as severe. SOUNDBITE: (English) "Probably we'll see another major correction for the U-S market in the next few weeks. If that happens, it will trigger a correction on the Hong Kong market as well." SUPER CAPTION: Frederick Tsang, BNP Primeast Securities Jiang Zemin's visit to the US was also a positive factor for Hong Kong stocks, primarily Chinese red chips and H-shares. The technology agreement signed raised a positive outlook for the competitiveness of Chinese companies. And as China edges closer to membership in the W-T-O (World Trade Organisation) investors will feel better about owning a piece of mainland assets. SOUNDBITE:(English) "The implicit benefit from the visit is that probably it will escalate China's being able to enter the W-T-O. We think that the visit has paved the way for the early entry next year for China to be a W-T-O member, and this is a very bullish factor for China's economic growth for the rest of the decade" SUPER CAPTION: Frederick Tsang, BNP Primeast Securities Hong Kong traders will have to hang on and hope the roller coaster continues up the hill. Find out more about AP Archive: http://www.aparchive.com/HowWeWork Twitter: / ap_archive Facebook: / aparchives Instagram: / apnews You can license this story through AP Archive: http://www.aparchive.com/metadata/you...
