Heads Up

PUBLISHED : Monday, 11 June, 2007, 12:00am
UPDATED : Monday, 11 June, 2007, 12:00am

Raft of data may lift higher or sink battered stocks deeper

How much more battering can the bulls take? Investors are entering another week hanging on to their inflated valuations by their fingertips and central bankers worldwide are giving them a good whack in an attempt to knock them down.

Fears of interest rate increases around the globe should keep buyers on the cautious side this week after the markets limped to a finish on Friday.

Bond yields suggest higher borrowing costs. Policymakers in New Zealand and Europe already raised rates last week, while the United States Federal Reserve indicated an interest rate cut was not likely.

Hong Kong investors can take comfort in the fact that the market here has shown some resilience.

However, with a raft of economic data due from various parts of the world expected this week, further signs of inflation could cause some jitters.

Beijing is releasing a string of economic data this week with the overall story expected to be rising inflation and strong growth.

The May producer price index will be released today. Tomorrow, the government will reveal the consumer price data and provisional trade figures for last month.

May retail sales figures are due on Wednesday, industrial data on Thursday and the fixed asset investment numbers on Friday.

US May retail sales data is due on Wednesday and investors should watch these figures for signs of renewed consumer confidence as much of what Americans buy comes from our backyard.

Producer and consumer price data due on Thursday and Friday will give investors another look at the US inflation situation.

The Bank of Japan's policy meeting ends on Friday and investors will be digging through their notes for signals that another rate increase is on the way.

The Hong Kong government tomorrow will auction off a plot in the West Kowloon reclamation area, with bidders expected to cough up HK$5.7 billion for the site.

Residential prices in the area are strong at about HK$7,000 per square foot, fuelling developers' interest in the land.

Fund-raising fever still high

The share market may be looking shaky but there are still plenty of companies hoping to tap it for funding.

Tianneng Power International, the mainland's largest lead-acid battery maker, will begin trading today.

Retail demand for the shares have been strong despite the company being at the centre of a controversy over alleged lead poisoning in several villages lying near its battery factory in Zhejiang province.

Regent Manner International Holdings, a Taiwanese printed circuit board assembler, will begin pre-marketing its share offering today. The company hopes to raise HK$700 million.

Guangdong-based developer KWG Property Holdings tomorrow will begin the international offering of what is predicted to be a HK$4 billion share float.

The company is evidently confident that investors will be eager to snap up its shares as it has almost doubled the planned size of its offering.

RREEF, Deutsche Bank's property and infrastructure management arm, on Friday will price what is expected to be a US$300 million offering.

The company has brought in the Government of Singapore Investment Corp as the only strategic investor for the deal.

Real estate investment trusts have been a bit of a disappointment in Hong Kong so far, but with equity markets heading south, investors may take another look at this offering for its stability. The indicative yield is about 6.4 per cent.

Game talk

On the conference circuit, an Asian gaming conference opens in Macau on Wednesday and Shanghai on Thursday hosts a global commodity investing conference.