On March 9, Hong Kong's Hang Seng Index hit a low of 11,344 points. Since then, it has gained more than 60 percent and ended the second half of the year on a firm note, rising past the 18,300-point level.
But analysts believe it is still too soon to say if it is the start of a bull market and they expect gains in the second half of the year to be smaller.
Francis Lun, general manager, Fulbright Securities, said: "Investors are optimistic that the Chinese economy will keep on growing and that will, in turn, benefit the Hong Kong economy. That's why the Hong Kong stock market has performed quite well during the second quarter."
Official data showed that China's first quarter growth was 6.1 percent and that has fuelled optimism in the stock market.
Analysts said the Hang Seng Index is headed towards the psychologically important 19,000 level, and could even hit that mark as early as the end of the week.
But unemployment in the city is at a three-year high and the government is forecasting full-year GDP to contract between 5.5 and 6.5 percent.
For the second half of this year, analysts have predicted that there will be a significant correction once the Hang Seng Index rises above the 19,500 level, although it could go higher in the longer term.
"The market is already ahead of the economy's fundamentals, so I can see the market reaching 20,000, maybe slightly beyond that. I think the maximum I'll predict for the market is 22,000. I don't see it going to 25,000," said Lun.
http://www.channelnewsasia.com/stories/economicnews/view/439460/1/.html
|
