Hong Kong Stocks Fall
Hong Kong Stocks Fall
Nov. 19, 1997
HONG KONG (AP) _ Hong Kong stocks dipped Thursday, but the fall was cushioned by a better-than-expected land auction that helped allay worries over interest rates and the region's weak currencies and stock markets.
The blue-chip Hang Seng Index fell 0.88 percent to 10,154.36 points, a drop of 90.82 points.
Trading was even thinner than the previous day, with turnover at 8.29 billion Hong Kong dollars. On Tuesday, turnover was 8.79 billion Hong Kong dollars.
But investors seemed somewhat heartened by robust bidding at a government land auction, where property market sentiment is often gauged.
Property stocks, which form a large part of the Hong Kong stock market, have been hit hard by recent sharp drops in the market. Analysts say property in Hong Kong is overvalued, and have predicted it will drop between 25 and 40 percent in worth.
Despite that, the auction of two smallish residential sites garnered 497 million Hong Kong dollars (dlrs 64.3 million) and helped allay ever present fears of interest rate hikes.
Worries that South Korea's economic trouble could spread to the region have also dragged down sentiment recently.
Traders are concerned that the South Korean won's weakness could affect Taiwan's currency, which would heighten fears over the stability of the Hong Kong dollar and trigger a rise in interbank interest rates.
David Masters, managing director of Kerry Investment Management Co. Ltd., called the auction result good news, but not enough to overcome concerns in the market about the regional currency turmoil.
``A relatively small sale, albeit at a higher than expected price, isn't going to overcome those factors,'' said Masters.
While he thinks most of the selling in Hong Kong over recent weeks is finished, Masters said it was unlikely prices and volume would pick up until investors were sure the Hong Kong dollar was secure.
Hong Kong's market began to fall last month after speculators mounted an attack on the Hong Kong dollar, which they believed was overvalued following the devaluation of several major Asian currencies.