THE announcement that the Government would set up a property task force saw investors scurrying from the sinking property ship into safe stocks such as utilities.
Now it seems even utilities are no longer a safe defensive stock.
Higher valuations caused by the influx of money leaving property counters and moving into utilities have made utilities look expensive.
Couple that with rising interest rates in the United States which flow directly into Hong Kong because of the peg, and utilities are now out of favour.
A recent Salomon Brothers report said that utility company valuations were stretched when looking at the market in the long term.
The report said that defensive sentiment caused investors to pick up some of the oversold utility stocks, whose prices fell on the prospects of rising interest rates.
Two of the favoured stocks were China Light and Power and Hongkong Electric.
