Hopes are rising for a market-bolstering cut in Hong Kong interest rates, an issue that was relegated to the back burner recently amid banking woes, a weaker Japanese yen and the threat of interest rate increases in the United States.
According to Lehman Brothers, the prime rate was on course for a drop of 100 basis points to 7.75 per cent this year as the best commercial lending rate in Hong Kong followed down interbank rates.
Many analysts last year had put a bullish rating on the market for the beginning of this year, forecasting a downward trend in rates would benefit the residential property market and add liquidity to the stock market.
Those predictions were put on hold when Guangdong International Trust & Investment Corp collapsed in mid-January and when Guangdong Enterprises (Holdings) sought a debt-standstill agreement a week later.
Brazil devalued its currency at around the same time.
More recently, Japan's weak-yen policy and speculation that the US would need to raise interest rates to slow feverish economic growth have added to concerns.