Lee Shau-kee, a bullish stock investor, is less optimistic about the stock market as volatile trading prompts him to push back his call of the benchmark Hang Seng Index hitting 33,000 points to 'two to three months after the Lunar New Year' from the end of December.
The Henderson Land Development chairman changed his tune after the market slumped on negative news that the much-awaited 'through-train' investment plan allowing mainland individuals to directly invest in Hong Kong stocks, was delayed until the second quarter of next year.
In addition there was pressure from the crackdown on illegal funds and the capping of cash withdrawals from Shenzhen to prevent investors pumping funds illegally into the Hong Kong stock market.
Mr Lee also poured cold water on a prediction by Stanley Ho Hung-sun, chairman of rival developer Shun Tak Holdings, that the index would end the year at 40,000 points.
The Hang Seng Index plunged 3.95 per cent or 1,136.78 points, to 27,614.43 on Friday, ending the week 4.06 per cent lower.
'The recent stock slump shows the impact of the crackdown on illegal funds flowing into the Hong Kong market,' Mr Lee said after casting his vote in district council elections yesterday. 'Investors should be careful in trading because the market is very volatile and the central government may issue more macroeconomic measures.'
VC CEF Brokerage director Louis Tse Ming-kwong said correction would be the theme of the Hong Kong stock market this week.
'The market is likely to open high but close low [today],' he said. 'Many investors dare not bottom-fish now, and expect to enter the market after more corrections.'
Mr Tse added that the selling pressure on H shares would be heavy under the shadow of Guangdong's clampdown on illicit money changers and limited bank withdrawals from Shenzhen. The H-share index tumbled 747.73 points or 4.28 per cent to 16.737.73 on Friday.
He said the market would be weighed down by a looming interest rate cut in the US and a credit crunch related to the subprime lending saga.