Hong Kong shares outlook: Lower on DJIA falls, HSI London declines

HONG KONG (AFX-ASIA) - Share prices are expected to open lower, with investors unnerved by the continued falls on the DJIA overnight and heavy losses in the European markets, dealers said.	    A sharp downturn in the Hang Seng London Reference Index will also exert pressure on the local bourse, with falls in some of the major blue chips seen dragging the HSI to below 12,500 points at the opening, they said.	    Results for 2000 from Cheung Kong and Hutchison Whampoa came in broadly as expected but there was nothing especially positive about them whilst the latest CPI data, showing increased deflationary pressures, can hardly prove encouraging in current circumstances, they said.	    Yesterday, the Hang Seng index closed down 532.59 points or 4.05 pct at 12,621.85, off a low of 12,585.77 and a high of 12,992.29, on turnover of 9.0 bln hkd.	    The Hang Seng March contract last traded at 12,550 points.	    The Hang Seng London Reference Index was down 258.88 points at 12,362.97.	    The overnight rate opened at 4.75 pct, unchanged from yesterday's close, while the 3-month HIBOR was also steady at 4.875 pct. 	    The base rate remains at 6.50 pct.	    Patrick Yiu, associate director with Kingways Securities, said he expects the HSI to breach 12,500 points at the open today.	    "The Hang Seng Index is seen breaching 12,500 points at the open. It is expected to hover between 12,300-12,400 points initially," he said, citing the falls in London trade.	    "Cheung Kong and Hutchison results were lower-than-expected, which resulted in sharp falls in London overnight. Both Cheung Kong and Hutchison will likely trade below 80.00 hkd today," Yiu said.	    HSBC will likely trade down to 88.00-89.00 hkd in line with London losses and concerns that the bank intends to introduce a series of new fees, including charges for use of its ATMs, he said.	    PCCW may be another feature, continuing under pressure ahead of results next week and on concerns that news that chairman Richard Li's educational record was overstated in publicity material may raise further doubts over the company's management.	    Sun Hung Kai Properties, however, may outperform the broader market on bargain-hunting after hefty losses recently, Yiu said.	    "It may test 72.00-73.00 hkd today," he said.	    Substantial declines, however, in the benchmark index look unlikely, with the HSI being heavily oversold during the past week, Yiu added.	    Ben Kwong of KGI Securities said the benchmark index will likely breach 12,500 points initially but late bargain-hunting should bring it back above that level.	    At the same time, "a sharp rebound is unlikely at this stage," he added. 

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