Trade slows amid caution and as cash stays out before IPO rush

Hong Kong shares budged a mere 1.63 points yesterday in quiet trade, as investors held on to their cash ahead of a stream of new share issues due soon.

The Hang Seng Index gained 0.01 per cent to end at 17,097.51 points after dipping to an intraday low of 16,957.23.

Turnover was HK$8.56 billion, less than $9 billion for only the second time last month, with activity also slowed ahead of the release of key non-farm payroll data in the United States today.

'There's no money coming into the region,' Lehman Brothers head of research Ian Wenham said, adding that activity was expected to pick up as fund managers and brokers returned from their summer holidays.

The downside, however, is that some investors may be piggy-banking funds for the fat flow of initial public offerings and other fund-raising expected between now and the first quarter of next year.

Upcoming floats include the Mass Transit Railway Corp (MTRC), which should raise at least HK$10 billion, and Sinopec's US$3 billion issue. China Mobile is also expected to raise more than US$5 billion in new shares to finance new mobile telephone networks.

'There will be lots of cash-raising with the IPOs for the MTRC, CNOOC [early next year] and Sinopec as well as share placements by Pacific Century CyberWorks and China Mobile,' said Tai Fook Securities sales director Andrew To Koon-hung.