Printable Version RTRS - 2008-03-12 1:13:54 REFILE-HK stocks seen leaping after Fed liquidity boost
(Refiles to fix typo in ICBC Asia item, paragraph 13)
HONG KONG, March 12 (Reuters) - Hong Kong stocks were expected to jump on Wednesday, in line with global markets, as investors cheer the moves by central banks to boost liquidity, shoring up the beleaguered credit markets.
Hong Kong should rise 6 percent at most, with the financials poised to build further on Monday's gains, said Andrew Clarke, trader at Societe Generale Securities.
"I would let it go up and short into it," Clarke said.
"These are all cosmetic things to make the market look better than it is. It will stabilise it but not fix it."
The U.S. Federal Reserve and four other central banks teamed up to get hundreds of billions of dollars in fresh funds to cash-starved credit markets, allowing financial firms to use securities backed by home mortgages as collateral for central bank loans.
Meanwhile, Hong Kong has little room to track an expected 50 to 75 basis points interest rate cut by the U.S. Federal Reserve next week because deposit rates are very low, Hong Kong Monetary Authority chief executive Joseph Yam told reporters.
Is this why FXI will drop $4.5 at the opening bell? Seems no matter what the Fed does it is a very short term affect. Maybe it is best to sit on the sidelines until the credit issues are worked out and a few banks go belly-up!