HONGKONG STOCK MARKET, June 20 -24, 1988
In the afternoon, however, confidence in the Market restored somewhat, and buyers came back into the game to help the Hang Seng Index to register a gain at the close of play.
The Japanese Market appeared to have reached an important peak, and many investors had been unloading their scrip over the previous few days to take advantage of the higher levels.
The Nikkei Stock Average, at the end of trading, had fallen 127.85 points to close at 27,732.93.
The increasing strength of the US dollar against the Japanese yen was the main cause of the decline, and Japa- nese investors were seen to be putting their money in the US and other Asian Markets rather than into the Tokyo
Stock Market.
There were fears that if the yen continued to deterio- rate against the US dollar there would be inflation in Japan and consequently a tightening of that country's money supply.
Concern as to when the US dollar would stop its climb also affected Japanese sentiment, since if the dollar rises too much, it could have serious consequences on the US trade figures and trade deficit.
But in America, the strengthening dollar and the pros- pect of lower interest rates boosted the Dow Jones Indus- trial Average to a new, post-Crash high.
Brokers said that many of the big name stocks were being picked up, and suggested that there was certain amount of window dressing by fund managers and large institutions before the end of the second quarter.
The US Commerce Department announced that the economy had expanded by 3.6 percent in the first quarter of this year, aided mainly by a cheaper dollar.
Market analysts said that the recent rise in the US dollar's strength should be kept in check if the US econ- omy is to continue its growth at the present rate.
A number of foreign exchange brokers thought that the Japanese Government was purposely weakening the yen against the dollar in response to the new US-Japanese agreements over beef quotas.
It was noted that the US-dollar sell orders that nor- mally come into play when the yen weakens to a certain
level had been lifted by the Japanese.
Brokers expected The Bank of Tokyo to step in and to ha yen's decline when the exchange rate was between 131 yen an yen to the US dollar.
After a see-saw day of movement, the Hang Seng Index clos 2,712.24, an increase of 8.50 points. The Hongkong Index follow ups and downs, closing at 1,795.40, up 4.39 points.
Turnover remained steady, with the final tally adding $HK1.59 billion, an increase of $HK131.47 million. Overseas interest made a mark on turnover,
but many
f
institutions remained cautious, uneager to take any risks in the v
Market.
Activity among the listed companies in Hongkong include announcement by Tse Sui Luen Jewellery (Holdings) Ltd of its to raise $HK154.7 million through a Rights Issue.
The company had plans to open more retail shops and showr in Hongkong, and to set up a manufacturing plant in China.
First Pacific Special Assets Ltd also announced plans for a Issue. The company hoped to reduce its debt by raising $HK5
lion.
Thomond Investments Ltd, the new owners of Asia Televisio
was still having problems.
Apparently, there were threats that ATV might lose its ope licence: Unless Thomond could satisfy the Broadcasting Auth television licensing regulations, the licence might go to tender.
The International Management Group scrapped its plan to live broadcasts of the Wimbledon Tennis Tournament at the F Hotel, giving Television Broadcasts Ltd (TVB), subsidiary of TVB Ltd, another chance to purchase the rights to screen the c
tition.
In New World Tower, the premium on the spot month of Jun back up to almost 12 points over the Hang Seng Index.
June closed at 2,724, a gain of 23 points, the month of July at 2,742, moving up 27 points and the far month of August was points to close at 2,745.
Major news included:
(a) The US free trade proposals, negotiations of which were adv at the recent economic summit between the 'G7' industri nations, could backfire, farm groups from 6 of the G7 n warned;
(b) Anti-Japanese feelings and fears of an 'invasion' into Aus
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