INVESTMENT DAILY

The Hang Seng Index is expected to trade at 19,000 to 19,400today

    The rise of Shanghai Composite Index didn’ t help Hang Seng Index. The indexdeclined on Tuesday, and it closed at 19,446 points, decreasing 148 points. HSCEIclosed at 8,058 points, dropping 86 points. Turnover was $69.6 billion. MTR(0066)high-speed budget ceiling proposal was backed by 99.83% voters, and its stock rose0.9% when it resumed trading on Tuesday. Furthermore, Lenovo(0992)gained 3.7%mainly due to positive profit performance expectation in the third quarter.

    Since concerns that Russia, Venezuela as well as other OPEC countries cannot reachagreement on production cut, oil price dropped sharply on Tuesday. As a result,investors reduced their holdings at financial and energy stocks, US stock marketfelling sharply on Tuesday. The Dow and the Nasdaq fell 296 points (to 16,154) and103 points (to 4,517) respectively. On the other hand, funds flow to treasury market,10 Year US Treasury Yield dropped 10 basis point to 1.87%.

    Given the lack of direction, together with investors lack of buying interest ahead ofCNY holiday, market turnover is low. Besides, derivative warrant and CBBCaccounted for 37% of market turnover, indicating investors lost interest on secondand third liners. We expect the trend to persist in the near term while 19,771 is theinitial resistance.