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Wednesday, August 10, 2016, 16:31

Stocks touch fresh 8-month high

By Reuters

SHANGHAI - Hong Kong stocks touched to a fresh eight-month high on Wednesday, before slipping back, as yield-hungry investors continued to hunt for bargains.

The Hang Seng index ended the day up 0.1 percent to 22,492.43 points. The index has gained about 9 percent over the past month.

The Hong Kong China Enterprises Index was up 0.2 percent, at 9,315.50.

"Money is flowing into Hong Kong stocks because they're relatively cheap compared with bonds," said Alex Wong, Hong Kong-based director at Ample Finance Group.

"But since the rally is driven by liquidity, not fundamental factors, I suspect the market will lose upward momentum before long."

Wong noted that recent buying appeared concentrated in some blue-chips that offer stable dividends, signalling that investors were seeking stable returns at a time when interest rates have turned negative in places such as Japan and Europe.

Hong Kong shares are now about 25 percent cheaper than their mainland peers, according to an index comparing the markets.

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