Hong Kong bourse expected to 'open red' for Year of the Horse
Brokers are nailing their colours to the mast on the prospects for Hong Kong stocks on the opening trading day of the Year of the Horse tomorrow - and it is red all round.
It is called "open red" if stocks rise on the first trading day of the Lunar New Year, representing good luck. If shares head the other way, it is known as "open black". And they are tipping a winning start to build momentum for a positive year when the market ends up "in the black".
"I believe it is likely we will open red on the debut of the Year of the Horse. The US market has turned stable, while the Hong Kong and mainland economic outlook is optimistic," said Christopher Cheung Wah-fung, legislator for the financial services sector, who is also a broker.
Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia and chairman Chow Chung-kong will host a market opening ceremony at the trading hall for the highly anticipated trading day tomorrow.
Secretary for Financial Services and the Treasury Chan Ka-keung and Securities and Futures Commission chairman Carlson Tong Ka-shing will attend the ceremony, which is held to bestow blessings on investors and traders during the festival.
Jeffrey Chan Lap-tak, chairman of the Hong Kong Securities Association, is also among those in the industry who believe the market will open red. "The markets fell quite a bit before the Lunar New Year. After the holiday, buying interest should return," he said. He expects shares in technology and alternative-energy firms and mainland banks to do well.
Chan said that while the market was expected to perform well in the Year of the Horse, local brokers would continue to struggle amid fierce competition on fees. High running costs would also make it hard for the smaller players to compete, he said.
Last year, 14 brokerages shut down. The city has about 500 stockbrokers, of which more than 400 are small operators.
"We would like to see the SFC and the exchange do more to promote the sector in the coming year," Chan said.
Louis Tse Ming-kwong, director of VC Brokerage, said the market would likely trade between 21,000 and 26,500 points during the Year of the Horse.