Hong Kong shares outlook: Mixed to higher on Wall Street/range trading

HONG KONG (AFX-ASIA) - Share prices are expected to open mixed to higher following gains on Wall Street overnight but trade is likely to be largely range-bound after the year to March 2002 budget failed to provide any convincing fresh lead, dealers said. China Mobile is likely to continue to attract attention on concerns over the impact of its new tariff structure and the possibility of sharp price competition in the sector. Property stocks may encounter profit-taking after the budget failed to provide any supportive measures for the local real estate market, they said. Yesterday, the Hang Seng index closed down 143.69 points at 14,177.36, off a high of 14,432.22 and a low of 14,141.41, on turnover of 7.84 bln hkd. The Hang Seng March contract last traded at14,060 points. The Hang Seng London Reference Index was down16.35 points at 14,161.01. The overnight rate opened at 5.1875 pct, compared with 5.125 pct at yesterday's close, and 3-month HIBOR opened at 4.9375 pct,unchanged. The base rate remains at 7.0 pct. Patrick Yiu, associate director with Kingsway Securities, said the market will likely be volatile. "While it is likely to open higher following the performance on Wall Street, profit taking later may curb initial gains," Yiu said, putting the trading range at 14,000-14,500 points. China Mobile will likely remain in focus, with the stock seen trading 36.00-38.00 hkd, Yiu said. "China Mobile may see some losses initially, on concerns over its tariff cuts, which may trigger a pricewar in China's mobile market," Yiu said. Ben Kwong, associate director with KGI Asia, said he sees the market in a narrow 14,000-14,300 points range. Kwong said the budget failed to provide any inspiration. "The budget failed to provide any measures to support the local property market. Profit-taking in property stocks may emerge today," he said, adding that the reduction in stamp duty on stock transactions will have very little impact.

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