Hong Kong investors are looking forward to Chief Executive Tung Chee-hwa's policy speech tomorrow with a mixture of fear, hope and apathy. The mood in Hong Kong has been grim for about two years since a brief Internet-inspired spurt in the economy ended in 2000. The high-cost SAR is grappling with difficult questions about its positioning as China rapidly opens its doors and many commentators blame the government for not providing a clear message on the way forward. 'It's important to boost confidence, confidence is extremely low,' said researcher Steven Xu from the Civic Exchange. A stirring speech from Mr Tung giving a clear vision of how Hong Kong will carve a niche in China's growth story could do just that and give a near-term filip to stocks. But investors are not expecting much inspiration from Mr Tung's words. 'I'm afraid the market has been disappointed by the last few policy speeches and investors will not get too excited in my assessment,' said Phillip Securities research director Louis Wong Wai-kit. Mr Tung is likely to be long on rhetoric and short on specifics, in view of the fact that his speech writer is Lau Siu-kai, a Chinese University professor known to be more interested in welfare issues than brass-tack policies, said Stephen Brown, the head of research for Kim Eng Securities. However, there is hope some good news will emerge from the address. Investors are expecting to hear about wealthy mainlanders being offered Hong Kong identity cards in return for them investing HK$3 million to $5 million in SAR real estate. 'If it [comes] true it might help the property market in Hong Kong,' said Kenny Tang Sing-hing, an associate director at Tung Tai Securities. Companies with mid to high-end real estate projects such as Sun Hung Kai Properties, Swire Pacific and Kerry Properties could gain on the news, he said. There are problems however. Firstly, the scheme would need the approval of mainland authorities which control the flow of migrants to Hong Kong. And secondly, while there are plenty of wealthy mainlanders, they, like Hong Kongers, may not have much confidence in parking their money in the SAR because of the government's weak performance, Mr Xu said. 'You still have to convince people to accumulate wealth in Hong Kong,' he said. The market's second big policy hope is that Mr Tung will outline how he is going to knit Hong Kong closer into the Pearl River Delta's growth story. In particular, some think there will be a clearer picture on a plan to build a bridge to Macau and Zhuhai. That would give a direct link to the western side of the delta which is a rapidly expanding manufacturing hub. Hopewell Holdings, the corporate vehicle of Sir Gordon Wu Ying-sheung who has championed the bridge project, should be a direct beneficiary. The stock was worth buying as it was still only trading at nine times this year's expected earnings and had steady cashflow from its mainland tollroads, Mr Wong said. Another beneficiary of better access to the western delta would be Shun Tak Holdings which owns stakes in gambling tycoon Stanley Ho's flagship Macau casino company and two Macau hotels, he added. While there is potential for upside surprises, there may also be some nasty medicine in the policy speech as Mr Tung articulates how the government will tackle its huge budget deficit. There is talk that the chief executive will outline a plan that will make the SAR's famous low taxes head higher, hurting personal disposable income and corporate bottom lines. Without giving away numbers, Mr Tung may herald a reduction of personal income tax thresholds in the March budget and an increase in the rate of both income and profits taxes. He might also give more guidance on a second round of cuts to civil service salaries which would also further depress weak consumer spending, analysts said. There is a chance that the market could even rally on the news but gains may be fleeting. 'In the short term, it shows that the government has a plan to reduce the budget deficit but in the medium to long term, it will hurt the economy,' Mr Tang said. Sectors to avoid in that scenario would be property plays and mid-range to upmarket retailers such as Esprit, Joyce and Jusco. 'It's going to be thematic, it's going to be short, [he] won't be announcing a budget,' he said.