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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: Tom who wrote (2589)	12/15/1998 8:34:00 AM
From: WONG	Read Replies (1) \| Respond to of 2951

Funds desert Hong Kong Investment fund net outflows top $100M for first 10 months of 1998 December 15, 1998: 8:02 a.m. ET HONG KONG (Reuters) - Hong Kong's unit trust industry registered net outflows of $104 million in the first 10 months of 1998, the Hong Kong Investment Funds Association said Tuesday. "We have found out that investors were experienced in dealing with the volatility in the global market over the last 12 months. They know they need to diversify their investments," Desmond Chan, chairman of the HKIFA, told a news conference. "This is exactly what the unit trust and mutual funds industry can provide to investors in Hong Kong, mainly to diversify their portfolios...rather than concentrating in the region or Hong Kong stock market. We expect the inflows will probably be higher than the outflows for 1999," Chan said. Of the 14 categories of funds monitored by the HKIFA, Hong Kong equities funds had the heaviest outflows at $89.85 million, about half of which was recorded in August when the Hong Kong government intervened in the stock and futures market, Chan said. "In August, the main reason of the redemption was the government intervention in the market," he said. "We believe that a lot of investors, particularly those in Hong Kong equities funds, had decided to take that opportunity to bail out of the market, because at that particular point of time the global economic environment was not that favorable." The government in August spent HK$118 billion ($15.22 billion) propping up the stock market to foil speculators that had sold shares short and then attacked the U.S.-Hong Kong dollar peg in the hopes of pushing interest rates up and stock prices down. The government said Tuesday it would consider an auction to dispose of the holding, though it would not be done over a short period of time. Chan also said as conditions in Asia stabilize, investors would gradually increase their holdings in the region. However, their approach would be selective buying, with the focus on markets that have more positive signs of recovery. "Meanwhile, in the next few months, bonds and cash products would probably remain as the mainstay of a typical diversified portfolio," he said. The net inflows of the unit trust industry in the first 10 months of 1997 were $1.53 billion. However, the figures included sales outside the territory. The HKIFA, comprising 50 fund management companies, changed the reporting basis from July last year to only those sales registered inside the territory.