CONFIDENTIAL
Mr Stewart
(Hong Kong Dept)
RE
RECEIVED IN
?/ M...
16 FEBIT
LKK to
102/1 7003
HONG KONG:
1.
INVESTMENT IN SOUTH AFRICAN STOCK
Thank you for your minute of 31 January to Mr Maud, and its enclosures.
2. I agree with you that the Treasury and the Bank of England appear to be au fait with Hong Kong's investment policies. I have discussed generally with the Treasury, who tell me (which you will already know that following uncertainty on the exchange market, HMG authorised Hong Kong to diversify the placing of its financial reserves out of sterling, so long as this was done reasonably gradually. From the sterling point of view, therefore, there is nothing to stop Hong Kong investing in South African or other stocks. The Treasury, as you say, are kept informed of Hong Kong's investment policies, and have no complaint to offer. At the same time, at desk level they acknowledge the potential sensitivity of South African holdings; if these became public and Hong Kong were publicly criticised, then they might want us to have a careful word with the Hong Kong Government.
Innan
4 February 1977
Cc:
Mr Smith Mr Maud
(Economists) (FRD)
PE Hall
Financial Relations Department
CONFIDENTIAL