``If you looked back at Clinton's visit, I believe this could trigger overseas investors or fund managers to reconsider the investment environment both in Hong Kong and China, which has now become more and more open,'' said research director Alex Tang at Core Pacific - Yamaichi International (HK).

Clinton, the first American president to visit China since the 1989 Tiananmen Square massacre, finished his nine-day trip in Hong Kong on Friday by saying the visit had helped defuse regional military tensions and would bring expanded US trade with Asia.

The US and China, however, failed to sign any important trade agreements during the visit, disappointing some investors who had expected some sort of deal.

But the trip has cast a favourable light on the Chinese investmentenvironment, Tang said. Investors could be more willing to venture into China as they saw the yuan would likely be kept steady and economic growth was not deteriorating as much as they had thought, he added.

``With all these positive developments, it is very likely US and European fund managers could start to re-evaluate these two markets which could trigger buying interest and that will provide good support for the market,'' he said.

Head of China research Lawrence Ang at Deutsche MorganGrenfell, also said Clinton's visit had helped soften China's image with US investors.

``Some Americans, including fund managers, still consider China a foe and a symbol of bad, suppressing human rights and with no freedom,'' he said.

But though Clinton failed to get concessions from China on such key issues as human rights and weapons proliferation, China exhibited some refreshing openness during his visit.

Among other surprises, state television broadcast live a news conference by Clinton and Chinese PresidentJiang Zemin during which Clinton rebuked the Chinese government for the bloody crackdown on pro-democracy demonstrations in Beijing in 1989.

Ang said better understanding of China should help lower the risk premium that it was paying in the international bond market, Ang said.

``If the premium narrows, investors' valuation on Chinese stocks will be higher,'' he added.

European investors were still conservative toward Asia but less-squeamish US investors could be interested in China and Hong Kong.

``I hope maybe in the third quarter more US investors will return,'' he said.

Fund managers were cautiously optimistic about the impact of Clinton's visit.

They were watching the relationship between China and the US, but also US government policies on economic and financial restructuring in Asia, said fund manager Tina So at Schroder Investment Management (Hong Kong) Ltd.

``I guess foreign investors will adopt a wait-and-see attitude. Don't expect an immediate return to Chinese stocks but if we see aperiod of economic stability, currency stability, we are likely to see more money return to this market. Maybe next year but not necessarily immediately,'' she said.So said the Clinton visit was positive because it would encourage China to integrate with the world economy and to reinforce economic reforms, which would make it a more favourable place for foreign investors.

``China also handled the situation much more openly, which will be encouraging for foreign investors in the long term,'' she said.

``So people will come back with a feeling that China after all still has good market potential in the 21st century.''