As the Hang Seng Index continues its bumpy ride into the fourth quarter, oil prices have been identified as the primary concern facing the global market.
The news comes amid mounting concerns oil prices will remain high during the winter due to increasing demand.
In a study by Pegasus Fund Managers for Sunday Money, 16 Hong Kong fund managers were asked their views about the fourth-quarter global investment environment. Of the potential risks identified, oil prices ranked top, with 30 per cent of respondents believing prices would continue to dominate the market into the new year.
This comes in direct contrast to the recent drop in oil prices resulting from the United States Government's decision to release 30 million barrels of oil from the country's strategic petroleum reserve. A similar release of six million barrels of heating oil by Japanese firms is expected to drag crude prices down further.
In any case, the fund houses surveyed had a surprisingly bullish view of the domestic market, predicting a year end surge to take the Hang Seng Index up to the 18,000-20,000 range. This forecast reflected the relatively minor effect that inflated oil prices were expected to have on Hong Kong's economy.
Lawrence Chen, assistant research manager of Pegasus Fund Managers, said high oil prices would not affect Hong Kong unduly.
'Hong Kong is relatively less influenced by high energy prices. Compared to Europe and the US, oil prices have a more marginal effect in Hong Kong on petroleum prices,' Mr Chen said.