HONG KONG, Oct 18 (Reuters) - Hong Kong stocks are expected to open lower on Monday in a pullback following recent gains, but insurers are likely to attract investor interest as AIA launches the retail portion of its Hong Kong IPO.
"The Hang Seng, which is still overbought in an unhealthy condition, seriously needs a correction today, something we already began to see last Friday," said Francis Lun, general manager at Fulbright Securities.
"There's been too much liquidity flowing in wildly since September, and we will only have more of that once the U.S. Fed announces its quantitative easing measures," Lun said, adding the Hong Kong market might drop to 23,500 points on Monday.
Brokers said rotational buying in insurance companies ahead of AIA's Hong Kong listing may aid demand for insurers.
(AIA's IPO is a fee bonanza and there are more to come; to read more click [ID:nTOE69G00R])
On Friday, Hong Kong stocks eased back from a 28-month high and historically overbought levels with the benchmark Hang Seng Index <.HSI> closing 0.4 percent lower at 23,757.63.
STOCKS TO WATCH:
- HSBC <0005.HK> has ended talks to buy an $8 billion
majority stake in South Africa's Nedbank
- Gold miner Petropavlovsk said its IPO of iron ore unit IRC in Hong Kong was oversubscribed after the miner halved the size of the offer and cut the price due to initial low demand. [ID:n LDE69E1ZJ]
- Taiwan's Foxcoon Technology Group, whose unit include Hon Hai <2317.TW> and Foxconn International <2038.HK>, will build a new plant in the Chinese city of Chengdu. [ID:nTOE69E05Z]
- Zijin Mining Group Co Ltd. <2899.HK> said it was ordered by the People's Court to pay 19.5 million yuan to compensate for property damages related to the collapse of a dam at the Yinyan Tin Mine in September. For more click http://www.hkexnews.hk/listedco/listconews/sehk/20101018/LTN20101018009.pdf
- Goldin Properties Holdings Ltd <0283.HK> proposed to issue as much as HK$5 billion in convertible bonds ($645 million) to repay shareholders' loans as well as to a finance property related business of the group. Shareholders would be offered two units of convertible bonds at HK$6.00 for every three shares held. For a statement click http://www.hkexnews.hk/listedco/listconews/sehk/20101015/LTN20101015769.pdf
MARKET SUMMARY *Nasdaq rises with Google, but Dow tripped by banks [nN15233187] *Dollar bears wary after reversal from lows [nTOE69H005] *Oil falls towrads 1-week low as investors ponder stimulus [nSGE69H002] (Reporting by Donny Kwok; Editing by Ken Wills)