The Hang Seng Index may have hit a one-year high on Friday, but investors seem to have lost their appetite for stocks as trading turnover levels have tumbled to a five-month low amid surging valuations and hiccups in the global economic recovery.
The average daily turnover for the first half of this month to Monday was HK$61.87 billion, the lowest since April's HK$61.77 billion mark. Trading levels on Monday barely topped HK$50 billion - the thinnest in more than two months.
Yesterday, the total was HK$30.99 billion, but there was only half a day of trading because of Typhoon Koppu.
Hong Kong's benchmark index, which hit a year high of 21,161.42 points last week, is up 5.79 per cent so far this month. The Hang Seng Index closed yesterday at 20,866.37 points. However, valuations have more than doubled to 22.1 times earnings from just 10.9 times earlier this year, according to Bloomberg.
'Not too many people are willing to get in at this level,' said Steven Leung, a director of institutional sales at UOB Kay Hian. 'People will mostly just stay on the sidelines and wait for [new] policies from China after October 1.'
The market is hoping that Beijing will unveil new stimulus measures next month while commemorating the 60th anniversary of the People's Republic.
The economic recovery across the border has slowed as bank lending has been reined in and exports shrank last month for a 10th month.