Hong Kong shares -- 2 (no tax changes expected: economist)

At 11:27 am, the Hang Seng Index was up 21.39 points at 14,342.44 on turnover of 2.99 bln hkd, while the Hang Seng March contract last traded at 14,275 points. Danny Chan, an economist with Dao Heng Bank, said he expects no tax changes in the budget. Chan said while the government will continue to run a fiscal deficit in the year to March 2002, it has already about 400 bln hkd in fiscal reserves accumulated over past decades to ease the deficit pressure. Chan added due to the strong economic recovery last year with robust growth in exports, the government is expected to see an increase in tax revenue in the first few months of the next financial year. The economist said he expects the government's deficit will be about 6 bln hkd in the year to March 2002. "Moreover, it is still too early to say whether Hong Kong is in a structural deficit or just a cyclical deficit. I do not think Financial Secretary Donald Tsang needs to introduce tax hikes at the moment," Chan said. Chan said the difficult task will be left to Tsang's successor Anthony Leung. While the government has introduced a series of stimulus measures for the property market in the past month, Chan said he does not rule out the possibility of the government cutting property duty to alleviate the burden on home buyers. Cheung Kong was up 0.25 hkd at 93.00, Sun Hung Kai Properties was up 0.50 at 86.00, while Henderson Land was unchanged at 47.10 and New World Development was steady at 13.60. HSBC was up 1.00 at 103.50, while Hang Seng Bank was unchanged at 95.00. Among telecom stocks, China Mobile was down 0.50 at 37.90, while China Unicom was up 0.10 at 11.15. Hutchison Whampoa was up 0.50 at 90.00 and Pacific Century CyberWorks was up 0.025 at 4.30. On the GEM board, tom.com was down 0.075 at 2.30 on profit taking and Sunevision was down 0.025 at 2.70.

Related stock : (NIL)