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To: DJBEINO who wrote (5411)	7/20/1999 12:40:00 AM
From: DJBEINO	Respond to of 9582

HK stocks surge in early trade, boosted by Taiwan HONG KONG, July 20 (Reuters) - Hong Kong stocks were sharply higher in early Tuesday trade following strong gains in Taiwan after the Taiwanese government announced further measures to stimulate the market depressed by a row between China and Taiwan. The blue chip Hang Seng Index (^HSI - news) jumped 273 points or 2.03 percent to 13,720 shortly after the market opened. ''A rally in Taiwan lifted the Hong Kong market but buying turned quieter after the Hang Seng Index rose more than two percent,'' said Antony Mak, sales director at Vickers Ballas. Taiwan's TAIEX (^TWII - news) jumped 401 points or 5.43 percent to 7,789 at 0230 GMT after the finance ministry said on Tuesday it planned to set up a T$500 billion national stabilisation fund and would take various measures to shore up sentiment. The Taiwan index dropped 13 percent last week after Taipei's abandonment of the ''one China'' policy triggered a row between China and Taiwan on the island's political status. ''The China-Taiwan tension is basically a war of words and there are no signs of deterioration so far. Therefore Hong Kong stocks staged a rebound after the Taiwanese market soared,'' said Alan Pau, associate director at South China Securities. Trading was active in early trade but the market could be more volatile depending on developments over the Taiwan issue, Pau said. Turnover was HK$1.78 bilion in the first 45 minutes of trade. China Telecom recouped its losses on Monday, up HK$1.60 or 7.22 percent to HK$23.75. It fell HK$1.50 on Monday after the company said it was in preliminary talks to buy mobile phone operations in China's Henan, Fujian and Hainan provinces. Total consideration for the acquisition was estimated to be around HK$54 billion to HK$65 billion, said Gilbert Chu, head of research at Sun Hung Kai Research said. ''China Telecom may have to perform a fund raising exercise as it is sitting with cash on hand of approximately HK$22 billion,'' he said. However, the acquisition should benefit the China mobile phone operator in the long term, brokers said. Other blue chips were mostly higher with Cheung Kong up HK$2.00 to HK$70.00 and HSBC rising HK$1.25 to HK$97.00. Brokers said the Hong Kong market had been overbrought and the China-Taiwan row provided a good excuse for the Hong Kong market to correct. ''The main index fell more than 1,000 points in the past week and it seems that it has found a support at 13,200 points,'' one said. July index futures gained 275 points to 13,725, August contracts added 280 to 13,740 and September rose 254 to 13,739 points. The H-share index (^HSCE - news) rose in line with the market, up 12 points or 2.12 percent to 582. The red chip Hang Seng China-Affiliated Corporations Index (^HSCC - news) advanced 19 points or 1.61 percent to 1,226. Video entertainment programmes distributor Universe International made its trading debut at HK$1.30 per share on Tuesday, up from an issue price of HK$1.22 each. Burlingame International jumped HK$0.056 or 37.58 percent to HK$0.205 after the company said it was in talks with an independent potential investor relating to debt and corporate restructuring schemes. biz.yahoo.com

To: DJBEINO who wrote (5411)	7/20/1999 12:41:00 AM
From: DJBEINO	Respond to of 9582

Taiwan announces stock stabilisation fund TAIPEI, July 20 (Reuters) - Taiwan announced plans on Tuesday for a T$500 billion (US$15 billion) stabilisation fund aimed at calming nerves shaken by the worst row with mainland China in three years. Stock prices on the island jumped on news of the fund, which includes T$3OO billion already announced. The benchmark Taiwan Index (TAIEX) surged 5.0 percent to 7,756.38 in early trade on heavy volume. The finance ministry statement came a day after Taiwan launched a massive defence of its markets against Chinese rage at Taiwan President Lee Teng-hui's controversial shift last week to a ''two state'' China policy. ''Sentiment has turned bullish after repeated state stimulus moves, which are all seen effective for both the short and long term,'' said Michael On, president of Beyond Asset Management. Of the T$500 billion in the stock defence fund, T$300 billion will be offered by four top state funds, and T$200 billion will be supplied by the treasury. The state contribution will come from an extra T$360 billion the ministry already authorised four top state funds to pour into stocks. The treasury will use state shares of listed firms as collateral to borrow its T$200 billion contribution to the new stabilisation fund from financial institutions, the ministry said. These state shares currently have a combined market value of some T$400 billion, it said. The ministry said it will complete the fund proposal by the end of July for cabinet approval, and expects to complete all related operations by the end of September. At US$95 billion, Taiwan enjoys the world's third-largest foreign-exchange reserves stockpile. The state funds have also been urged to buy mutual funds to stabilise a stock market battered by media reports that Beijing was preparing a military response to Taipei's rejection of the ''One China'' policy, a lynchpin of regional security for decades. China's angry response to Taipei's policy shift triggered a 14 percent fall in Taiwan stocks last week. In addition to the fund, the ministry said it would take various measures to support the stock market when necessary, including a flexible adjustment of credit trading ratios -- margin-buy or short-selling -- for stocks. The ministry will also coordinate local mutual funds and require securities brokerages to adjust their share holdings flexibly in order not to cause panic selling in the market, it said. When necessary, the ministry will also limit short selling of stocks, the statement said. The central bank also has agreed to offer adequate liquidity when necessary to support securities brokerages and their margin loan operations, and may take other unidentified measures, it said. The ministry said it had reported the proposals to Premier Vincent Siew in a cabinet meeting held on Monday to discuss tensions with China. China regards Taiwan as a rebel province and has pushed the for the island's diplomatic isolation since the communists won a civil war in 1949 and drove the Nationalists into exile. Relations are now at their lowest ebb since 1996, when Beijing launched wargames off the Taiwan coast in a bid to intimidate the island during its first democratic presidential elections. The funds involved are the state pension fund, labour pension fund, labour insurance fund and state postal fund, the biggest pools of deployable capital under state control. (US$ equals T$32.3) biz.yahoo.com