3
But, significantly, there was no panic. A
deliberate run on the Bank of China group of banks caused some short-term liquidity problems. This was dealt with by the rest of the banking system and by Government intervention. The Hong Kong dollar exchange rate stayed stable thanks largely to its link with the US dollar. And our financial institutions, newly strengthened since the crash in October 1987, absorbed the strain without
difficulty.
Since June, things have improved. The stock exchange index has climbed steadily and the volume of
trading has gradually increased.
Middle-income flats,
which came on the market after June, were all snapped up within the first few days of sales opening Consumer
spending has recovered, And on the whole, life has
returned to normal. In fact, those of you who know Hong Kong well will find it the same hustling, bustling business capital of the Far East.
The impact on confidence has also been felt in
another way. After June 4, long queues formed outside the consulates. Many who had previously hesitated submitted applications for immigration. The search for insurance
policies in the form of foreign passports intensified. We estimate that 42,000 people will emigrate this year, double the average for the first half of the decade. We anticipate