HONGKONG STOCK MARKET, June 20-24, 1988
On the corporate front, 2 hotels in Toronto were bought by the Shui On Group for $C8.3 million (about $HK536 million) in the company's first major investment outside Hongkong.
In the final stage of the New Zealand-based Equiti- corp Group's restructuring, the new holding company of the group, Equiticorp International, announced the terms of its offer for the group's locals-listed company, Capital- corp International Ltd.
Video Technology International (Holdings) Ltd posted a Net Profit of $HK150 million for the Year ended March 31, an increase of 150 percent over the previous Year.
Chintex Oil and Gas Company Ltd also announced its Year-end Results with a Consolidated After-Tax Profit of $HK20 million for the Year ending March 31, compared to $HK339,000 in the previous Year.
Lawe Williams Enterprises Ltd revealed that plans were underway, possibly involving the issue of new shares, to reactivate trading in the shares of the company, trading which has been suspended since 1977.
In Japan, the Nikkei Stock Average plunged 203.43
points to close at 28,139.03. Analysts attributed the fall to profit taking after recent gains, and fears over inflation.
In New World Tower, the spot month of June was down 32 points to 2,728, the month of July was down 17 points to 2,743 and the far month of August also closed at 2,743, down 22 points.
Major news included:
(a)In an attempt to increase its foreign trade, the Chinese
Government asked the US for trade concessions, of- fering a bigger share of the Chinese market as a car-
rot;
(b)Japan agreed to increase the quotas of beef and citrus
fruits that it imports from the US. By 1992, the quotas will end altogether; and,
(c)Chairman of the Broadcasting Authority, Mr Allen
Lee, warned the new owners of Asia Television Ltd that the station's licence may not be renewed if the company failed to comply with the new licensing regu-
lations.
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Tuesday
The prospect of inflation in the US and in Japan gripped investors once again and fears of resulting interest rate hikes initiated a selling spree in most equity markets.
Although the word from Toronto, where the leaders of the 7 most industrialized nations were having their eco- nomic summit, was that an increase in interest rates could be tolerated, punters seemed to think otherwise.
And it was pointed out that it was not those 7 govern- ments that could determine the direction of global equity markets but the central banks, whose job it is to make the ultimate decisions with regards to monetary policy.
Both Wall Street and Tokyo registered heavy losses during the previous day's trading as investors feared that a tighter control over credit was imminent.
The Dow Jones Industrial Average lost slightly more than 20 points overnight to close at 2,083.93, and this had an immediate effect when the Hongkong Market opened
for trading.
Foreign investors began to unload scrip and the trend was further fuelled by news that the Nikkei Stock Average was plummeting more than 200 points for the second day running.
However, a number of brokers remained optimistic, commenting that the Hongkong Market was merely expe- riencing some technical consolidation after its recent gains.
The losses incurred during the previous few days had been anticipated, said brokers, and the underlying senti- ment remained basically bullish.
The 2,600-point barrier was expected to prove a strong support level should the Hang Seng Index fall any further.
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