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To: Pierre J. LeBel who wrote (51677)	9/6/1998 8:12:00 PM
From: flickerful	Respond to of 58727

MondayÿÿSeptember 7ÿÿ1998 Business chiefs fear damage to free market ANGELA LI Intervention in stocks and futures will hurt Hong Kong's free market reputation, executives say. A total of 53 per cent of senior executives questioned in a survey said the intervention would downgrade free market status, while 33 per cent disagreed and another 14 per cent did not know. "The answer is obvious - how could Hong Kong claim a free market status?" one respondent asked. But another respondent argued: "All governments intervene. Why can't Hong Kong?" The special survey was conducted between August 25 and 28 by the Hong Kong Policy Research Institute with 134 respondents. A total of 52 per cent said it was appropriate for the Government to intervene in the stock market, while 41 per cent disagreed. Those who supported the Government's intervention considered it should be the administration's role to protect the economy and to maintain the order and stability of the market in a period of speculative attack. One opponent said the Government's move "risked taxpayers' money to entertain the interests of the few". Despite the majority support for the intervention, 52 per cent of respondents did not believe it would reduce speculation against Hang Seng Index futures and Hong Kong dollar exchange rates. Only 30 per cent believed otherwise. Those who disagreed argued speculation in a free market was legal and legitimate. Views were split on whether the Government could achieve its self-declared objective of penalising speculators: 46 per cent agreeing and 36 per cent disagreeing. Of those agreeing, the consensus was that the effect would be short-term. In the long-term, the Government would have to develop new measures and strategies to maintain the market. Those who disagreed were worried about the effects of the action on market forces and its long-term damage to Hong Kong. A total of 52 per cent of respondents, however, were optimistic intervention would not drive long-term investors away from Hong Kong, as against 30 per cent who thought it would.

To: Pierre J. LeBel who wrote (51677)	9/6/1998 8:15:00 PM
From: flickerful	Read Replies (1) \| Respond to of 58727

MondayÿÿSeptember 7ÿÿ1998 New measures to boost HSI STEWART OLDFIELD Hong Kong shares are likely to be supported by the Government's drive to squeeze speculators this week, resisting the malaise on global markets unless that malaise induces panic. Last week, the share market dropped 4.35 per cent but ended the week on a positive note on Friday, rising 2.32 per cent. Turnover declined to a relatively sedate $6.85 billion on the last day of the week, in stark contrast to the previous Friday's record turnover of $79 billion. One trader said there was no downside to the market because of the unavailability of stock to short sell. "You can't run an arbitrage book and if you are a hedge fund, you can't hedge a a futures position," she said. Worries of a global recession were unlikely to break the cast, she said. "Hong Kong is riding on its own steam at the moment." Other brokers said concern about Malaysian and eastern European markets would cap any substantial market gains. Hints from Federal Reserve Board chairman Alan Greenspan that the United States could cut rates underpinned the impact the collapse of emerging markets in Asia and eastern Europe could have on global economic growth, brokers said. On Friday, Wall Street finished 0.54 per cent lower at 7,640.25 points, a 5.1 per cent loss for the week. Futures and options trader Dun Lee said hedge funds would be under pressure to crystallise any gains as their financial year's end approached. "I am sure a lot of these guys are under a lot of pressure to take profits," he said. Another embattled trader said: "This market hangs on what the Government decides to do on a whim." Measures announced at the weekend by Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong could also instil confidence in interest rate sensitive investors. HSBC finished the week at $154, despite brokers believing the Government had been quietly increasing its stake in the banking behemoth. Prudential-Bache technical analyst John Schofield said the Hang Seng Index was capped above the 7,800-point level. "It is obvious that there is an overhang of stock here," he said. Brokers concurred that market volumes were likely to remain subdued as speculators and big arbitrage players left the market to burnt-out local fund managers and punters. "The Government has succeeded in driving the speculators and everybody else out as well," one broker said. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Crises put pressure on currencies AGENCE FRANCE-PRESSE in Singapore The financial troubles of Latin America and Russia are expected to cast a shadow over Asian currency markets this week, with Malaysia's unfolding political drama providing a sordid sideshow. Most Asian currencies ended last week stronger, courtesy of the appreciating Japanese yen, although dealers and analysts said this reflected US dollar weakness rather than any upturn in Japan's economic prospects. The United States financial community is worried that the crises which have gripped Asia and Russia are now squeezing Latin America. British investment house Schroders said "the more immediate concern for economic activity is not in Europe but across the Atlantic in the US. Worries that Latin America will suffer the Russian contagion persist". The yen ended the week higher, around the level of 133 against the dollar, from 143 the week before, because of bearish sentiment on the dollar. The Singapore dollar closed the week at S$1.751 to the US dollar from $1.7791, the Thai baht at 40.90 from 41.95, the Philippine peso at 43.76 from 44.22 and the Indonesian rupiah at 10,725 from 11,025. The South Korean won, weakened by the fallout from Russia's problems, fell to 1,342 to the US dollar from 1,331.8, while the Taiwan dollar rose slightly to NT$34.571. The Malaysian ringgit's exchange rate was fixed at M$3.80 to the US dollar, from its close of $4.234 in the previous week, as part of drastic measures that shocked the global financial community. Malaysia announced last week that it was adopting a fixed exchange rate and pulling the ringgit out of international circulation. The stroke, engineered by Prime Minister Mahathir Mohamad, threw Malaysia into the ranks of China and other countries with capital restrictions, risking a foreign investment slump in favour of stability. Malaysia's capital controls generated beneficial side effects for regional currencies. "Mahathir's moves will help other Asian currencies in the very short term by encouraging traders to close outstanding short positions," said analyst Christopher Wood of Santander Investment Securities. The repercussions from the capital controls and the sacking of deputy prime minister Anwar Ibrahim, which signalled the victory of nationalist financial policy-makers, were felt most strongly in Singapore. "If something drastic happens in Malaysia, then we could see fallout on the Singapore dollar, which has been considered by some as a proxy for the regional currencies," a dealer said. Banks in Singapore scrambled to cope with a one-month deadline imposed for ringgit assets stashed overseas to be repatriated or be deemed worthless. scmp.com

To: Pierre J. LeBel who wrote (51677)	9/6/1998 8:20:00 PM
From: flickerful	Respond to of 58727

for a sense of our true understanding... these were some of the remarks in yahoo finance as of 7:31pm.....about the nikkei. ''The Nikkei average is not likely to go upward nor downward,'' said Yasuo Ueki, general manager at Nikko Securities Co Ltd. ''It will likely hover around 14,000 in a narrow range.'' He said, as long as U.S. stocks remain stable, the downside of the Tokyo stock market will be limited. The yen's strength will also be supportive to Tokyo stocks, he said. The yen's rise increases the value of yen-denominated assets. An analyst at Wako Securities said any fall in the Nikkei would be limited due to recent active buying in futures.