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into account the lack of policing, and the laxity and imbalance of the exchange management. They believe that once the market stabilises, overseas investors will return, albeit more cautiously, but that the level of overseas investment is unlikely to reach its pre-crash levels.
7. Among others in Wall Street who mostly have a limited interest in and only a hazy understanding of Hong Kong, views of Hong Kong as the "Wild East" were reinforced. Restoring Hong Kong's image to this group will take more than a return to stable trading.
8. However, the most negative views on Hong Kong's action have tempered and softened as the dust has settled, and some perspective was provided by post-mortem revelations of how the New York Stock Exchange itself came close to closing and that consultations had gone as far as the White House.
Nevertheless, the fact remains that Hong Kong was the only trading floor to shut down.
9. A favourable view is taken, however, of the Government's actions taken in the turmoil. Finance leaders describe the establishment of the Securities Review Committee as "helpful", and the appointment of Robert Fell as Chief Executive of the Stock Exchange is deemed reassuring". The Bank of China's involvement in the rescue package was widely seen as a positive and welcome contribution which sent all the right signals about China's intentions in Hong Kong to the international community.
10. While some would weigh Hong Kong's diminished credibility against investors' short memories, others are quick to point out "the weaknesses and instability of the Hong Kong system" which, they say, the crisis has shown up.
Criticisms
11. Among the perceived weaknesses of the system are:
a)
b)
c)
d)
e)
£)
Damage
lack of professionalism in the running of the market; conflict of interest ignored-in market management; loose listing requirements;
24-hour cash settlement system dangerous and unrealistic;
control of market in the hands of small local brokers is disproportionate to amount of investment represented by overseas corporate dealers; and
lack of appropriate safeguards against the inevitable external pressures to which an open market such as Hong Kong is vulnerable.
12. The damage to Hong Kong's image is obvious but generally seen as short-term. Memories are perceived to be short when new opportunities arise to make money.
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