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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: MythMan who wrote (48705)	6/22/1999 2:58:00 PM
From: Lucretius	Read Replies (1) \| Respond to of 86076

bond mkt is getting ready to close... turn that hat around... time to get your fingers on the buy buttons...

To: MythMan who wrote (48705)	6/22/1999 2:58:00 PM
From: IceShark	Read Replies (1) \| Respond to of 86076

Eight days and Fleck owes me a beer. Why don't I feel happy? -f-

To: MythMan who wrote (48705)	6/22/1999 3:02:00 PM
From: John Pitera	Read Replies (1) \| Respond to of 86076

Have you seen this??Hong Kong Decides on a Way to Sell Big Portfolio of Shares June 22, 1999 By MARK LANDLER ONG KONG -- For sale: $25-billion worth of shares in blue-chip companies of Hong Kong. Seller seeks individual or institutional buyers. Few other details available. Call Hong Kong government. Ten months after plunging into the stock market to fend off what it called an improper speculative attack, the government here said Monday that it would sell off most of its enormous portfolio of shares by creating a mutual fund that tracks the Hang Seng stock index. The Exchange Fund Ltd., a company the government had set up to manage the shares, said it would seek a listing for the mutual fund in four to five months, depending on market conditions. Government officials said they would sell the portfolio incrementally, but they offered little in the way of details. "Our primary objective remains the disposal of the shares in the Hong Kong equity portfolio in an orderly manner without disrupting the market," said Ti-Liang Yang, the chairman of the Exchange Fund. Shareholder relief was evident as the market reached its highest close since Oct. 13, 1997. The Hang Seng index surged 585.96 points, or 4.37 percent, to close at 13,994.23. Since Hong Kong's buying spree last August, some investors had worried that the government would not be able to dispose of the shares without selling them on the open market, which could have hammered their price and shaken the confidence of investors in this already fragile enclave. "When you have a portfolio of this size, even in a benign market you need to think about how to create demand," said Richard Margolis, first vice president of equity research at Merrill Lynch & Co. here. "This kind of structure prevents large amounts of stock flooding the market." Government officials did not say how large the fund would be. But Yang said it "should be of a size that would facilitate participation by the retail public in Hong Kong." He also predicted that it would be attractive to foreign investors who are interested in the Hong Kong market. The announcement was not a surprise. Senior officials had hinted for weeks that they would soon introduce a mechanism to sell off the portfolio. In April, the Exchange Fund retained Goldman, Sachs; Jardine Fleming, and ING Barings to devise proposals for disposing of the shares. But the announcement is another milestone in what has become an unexpectedly profitable foray by the Hong Kong government. Investors were stunned last summer when the traditionally hands-off government began buying shares on a huge scale to prop up the Hang Seng. The goal was to foil hedge funds and other speculators, whom the government accused of improperly manipulating the market by selling short Hong Kong shares while simultaneously betting against the Hong Kong dollar. The government's counterattack drove out the speculators but left it holding $15-billion worth of stock at the nadir of the Asian economic crisis. The move engendered lacerating criticism from economists, including Milton Friedman, the Nobel laureate, who said that Hong Kong had soiled its reputation as the freest market in Asia. By buying at the bottom, though, the government was able to ride the rebound in the Asian markets. After months of steady gains, its portfolio has grown in value to $25.8 billion from $15.2 billion. Officials here have resisted gloating over their good fortune. But they note with satisfaction that currency traders like George Soros have not been seen in the Hong Kong market since the intervention. "In strictly monetary terms, it is a huge home run," said Mac Overton, a financial consultant at Sun Hung Kai Trading Co. Ltd., a local property developer. "From a philosophical point of view, it is a dangerous precedent to set. It becomes a credibility problem at some point for Hong Kong." Margolis agreed that it was difficult to judge Hong Kong's intervention purely on its short-term profits. "From a financial perspective, it will be deemed a success," he said. "But there are other factors. And when the postscript is written, these factors will mitigate the gains. The government did do violence to its free-market reputation." nytimes.com