Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: robnhood who wrote (27887)	9/14/1998 9:20:00 PM
From: HairBall	Respond to of 94695

rrman: I am not sure....appears so! Regards, LG

To: robnhood who wrote (27887)	9/14/1998 10:42:00 PM
From: Moominoid	Respond to of 94695

According to my diary (an Australian diary so it has East Asian holidays in it) it's the Respect for the Aged Holiday today in Japan. David

To: robnhood who wrote (27887)	9/14/1998 10:54:00 PM
From: flickerful	Respond to of 94695

japan is on holiday tomorrow, the market is closed. <eom>

To: robnhood who wrote (27887)	9/15/1998 4:27:00 AM
From: flickerful	Respond to of 94695

south china morning post TuesdayÿÿSeptember 15ÿÿ1998 Yam comments trigger US$1.2b hit on reserves PETER CHAN Hong Kong yesterday was hit with a significant single-day fall in its foreign-exchange reserves after near-panic selling of its currency for United States dollars. The selling amounted to HK$9.33 billion, the equivalent of US$1.2 billion, and was absorbed by the Hong Kong Monetary Authority (HKMA). The move away from the Hong Kong dollar began after HKMA chief executive Joseph Yam Chi-kwong was reported as saying he would change the rate at which the authority provided undertakings for banks to convert the SAR's currency into US dollars, to HK$7.8 from HK$7.75. The HKMA issued a clarification, saying it was committed to the HK$7.75 rate for at least six months. But the HKMA's reassurance came too late for the market. Banks and corporate treasurers - who had set their hedging and stop-loss positions at HK$7.75 against the US dollar - had interpreted Mr Yam's comment as an indication that the Government intended to devalue soon the local currency by 0.6 per cent, so they, too, joined in the selling spree. As the sale of US dollars by the HKMA to fund the Treasury drawdown was close to completion, the authority's absorption of all Hong Kong-dollar selling yesterday would lead to a shrinkage in the aggregate balance of the banking system tomorrow, when the deals are to be settled. This forecast shrinkage in the aggregate balance pushed up interbank rates to levels significantly higher than their Friday closes. One banker complained that this sudden increase in rates helped speculators to pocket US$8 million in profit from yesterday's settlement of Hibor-futures contracts. His calculation was based on the settlement of about 10,000 contracts at a three-month Hibor fixing of 11.89375 per cent, 2.38 percentage points higher than Friday's 9.51316 per cent. The six-month Hong Kong-dollar forward premium was also pushed up to 2,150 points from 1,950 points on Friday. The higher level should enable speculators to unwind their short forward points without suffering huge losses. "The Government has basically helped the speculators get out of the market," the banker said. A trader from a European bank said there were no speculators selling the local unit in the market. "Most of the selling was from local banks and corporates," he said. At 4pm yesterday, the HKMA issued its statement, saying it had decided to leave the rate for its convertibility undertaking at HK$7.75 per US dollar unchanged for at least six months. Both the one-month and the three-month rates finished at 10.75 per cent, off from highs at 12.25 and 12 per cent amid this last-minute clarification. The Hong Kong dollar spot rate strengthened to HK$7.7460 from HK$7.75 against the US currency. Commonwealth Bank of Australia treasurer Andrew Fung Hau-chung said he expected interest rates to remain volatile in the next two days before yesterday's selling would settle tomorrow. Another bank treasurer said pushing interest rates to levels painful enough to invite US dollar selling would be the only way to enable the HKMA to buy back the US dollars and to replenish the shortage in the aggregate balance of the system's liquidity.