RESTRICTED
RESTRICTED
FM HONG KONG
TO IMMEDIATE FCO
TELNO 1985
OF 161055Z JUNE 89
INFO IMMEDIATE WASHINGTON, PEKING
HKC100/1
STATE OF HONG KONG MARKET 16 JUNE 1989
SUMMARY
020214 MDHIAN 9619
q Dist
THE HANG SENG INDEX CLOSED 2 POINTS UP ON LACKLUSTRE TRADING. THE
MONEY MARKET REMAINED STABLE WITH THE HONG KONG DOLLAR EXCHANGE RATE
EASING SLIGHTLY.
DETAILS
2. FOLLOWING YESTERDAY'S 40 POINT FALL, THE HANG SENG INDEX DROPPED 30 POINTS IN THE FIRST HALF HOUR OF TRADING. THE INDEX REBOUNDED FROM A MORNING LOW OF 2306 TO CLOSE AT 2324, WITH A NET
FALL OF 16 POINTS FOR THE MORNING. IN THE AFTERNOON THE INDEX CONTINUED TO REBOUND, MOVING AS HIGHT AS 2352, TO CLOSE AT 2342. THE TOTAL GAIN FOR THE DAY WAS 2 POINTS WITH A TURNOVER OF
APPROXIMATELY HKDOLLARS 1 BILLION.
3
THE INDEX DRIFTED IN THIN LACKLUSTRE TRADE TODAY. THE EARLY
SELLING PRESSURE STEMMED FROM POSITION CLEARING AHEAD OF A LONG
WEEKEND AND JITTERS ARISING FROM DEATH SENTENCES IMPOSED UPON THE
THREE PROTEST LEADERS IN CHINA. THE CANCELLATION OF UNIVERSAL
APPLIANCES' 54 MILLION DOLLAR CASH CALL TO FUND EXPANSION PROJECTS
IN CHINA ADDED TO THE BEARISH SENTIMENT OF THE MARKET. SINCE THE LAST NORMAL TRADING DAY ON 18 MAY, THE INDEX HAS NOW FALLEN BY
SOME 28.5 PERCENT.
TRADING IN THE HANG SENG INDEX FUTURES MARKET REMAINED LIGHT.
A TOTAL OF 1153 CONTRACTS WERE TRADED TODAY. THE JUNE CONTRACT
CLOSED AT 2335 WITH A 7-POINT DISCOUNT TO THE SPOT MARKET. THE
AUGUST CONTRACT CLOSED AT 2338 WITH A 4-POINT DISCOUNT TO THE SPOT
MARKET. THERE WAS NO TRADING IN THE OCTOBER AND THE DECEMBER
CONTRACTS.
5.
THE MONEY MARKET REMAINED STEADY TODAY WITH THE HONG KONG DOLLAR
EXCHANGE RATE EASING SLIGHTLY TO CLOSE AT ABOUT 7.787 AND INTEREST
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