Hong Kong shares are poised to continue their upward trend next week and could hit fresh highs, dealers said Friday. Eugene Law, head of research at Celestial Asia Securities Holdings, said liquidity would remain strong after the market hit a record high this week.
"Interest in equity markets around the globe remains strong and I expect the US and Japanese markets to touch new highs next week, which would lift Hong Kong and other markets," he said.
For the week to July 6, the Hang Seng Index is up 759.01 points at 22,531.74.
"US bond yields are falling and investors will naturally buy more stocks. "I also expect liquidity to remain strong... and this, I believe, will enable the market to hit the 22,800 points level next week," Law said.
"Some fund managers now consider scores of Hong Kong stocks as expensive. However, other institutional investors, especially those who are new to this market, take a different view and they will buy counters in which they see value," he said.
However, Castor Pang, strategist at Sun Hung Kai Financial Group, said stock prices could retreat if the expected investment inflows failed to materialise.
Andrew Sullivan, head of sales and trading at Daiwa Securities, cited US June jobs data, due tonight, as one of the factors that would influence trade on Monday. Sullivan also said this week's falls on Chinese bourses had allayed concerns that authorities would take further measures to steer liquidity away from the equity markets.
"The evidence of the stock market bubble being reined in means there is less pressure to raise interest rates or do anything else," he said.