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To: yard_man who wrote (4320)	8/24/1998 10:18:00 PM
From: Joseph G.	Read Replies (1) \| Respond to of 86076

<<HONG KONG, Aug 25 (Reuters) - Hong Kong stocks are set for more gains on Tuesday, with the government expected to continue propelling prices higher while a better tone in overseas markets should offer further support, brokers said. ''It looks like the government will continue to intervene and push the index. I think there is a slight chance there will be a break of 8,000 today,'' said Alex Wong, research manager at OSK Asia Securities. ''They want to squeeze the short sellers out.'' The Hang Seng Index jumped 317.87 points, or 4.22 percent, on Monday to close at 7,845.48 points on hefty turnover of HK$9.80 billion. Brokers said the government was probably responsible for about half of Monday's turnover. ''I think the government will try to make use of the strengthening yen and also the recovery of overseas markets to further push up the index in order to force speculators to square their short positions,'' said Ben Kwong, head of research at Dharmala Securities. ........ Wong said the Hong Kong government appeared to be having some success in chasing short-sellers out of the futures market ahead of the expiry of the August Hang Seng Index contract on Friday. Open interest had remained steady while the government has been building up futures positions, Wong noted. Open interest in the August futures contract at the close of trade on Monday was 58,335 contracts and open interest in the September contract was 57,496. "There has been some huge short covering," said Wong. In London trading, Hong Kong shares slipped overnight with the Hang Seng London Reference Index falling 1.08 percent to 7,760.99. Brokers noted that the fundamentals remained bleak. On Monday, the Hong Kong government announced a fall of 16 percent in retail sales in June, the eighth consecutive month of decline. More grim news is expected on Tuesday with hotelier Shangri-La Asia Ltd (0069.HK) due to report its first-half 1998 results. Analysts expect a drop of about 26 percent. ''Nowadays, because of government intervention, I don't think the news will have too much impact because the market is just ignoring fundamental factors,'' said Kwong.>>