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005747
MDHIAN 9014
HKC100/1
TOP COPY Q DIST >
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FM HONG KONG
TO IMMEDIATE FCO
TELNO 1940
OF 13103OZ JUNE 89
INFO IMMEDIATE WASHINGTON, PEKING
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STATE OF HONG KONG MARKET : 13 JUNE 1989
SUMMARY
THE HANG SENG INDEX CLOSED 85 POINTS DOWN ON MODERATE TURNOVER. THE MONEY MARKET REMAINED STABLE WITH THE HONG KONG DOLLAR EXCHANGE RATE LITTLE CHANGED.
DETAILS
2. FOLLOWING YESTERDAY'S STRONG 172 POINT REBOUND, THE HANG SENG INDEX DROPPED 56 POINTS IN THE FIRST HALF HOUR OF TRADING. THE INDEX CONTINUED TO FALL THROUGHOUT THE MORNING AND CLOSED AT 2347, WITH A NET DROP OF 93 POINTS FOR THE MORNING. IN THE AFTERNOON, THE INDEX REBOUNDED SLIGHTLY TO CLOSE AT 2355. THE TOTAL LOSS FOR THE DAY WAS 85 POINTS WITH A TURNOVER OF HKDOLLARS 1.67 BILLION.
3. AFTER FOUR CONSECUTIVE DAYS OF RISING MARKET RESULTING IN A RECOVERY OF 344 POINTS, INVESTORS TOOK PROFIT AND BROUGHT THE INDEX DOWN BY 3.5 PERCENT TODAY. ACTIVE OVERSEAS SELLING WAS THE MAIN CAUSE FOR THE FALL BUT SOME LOCAL BARGAIN HUNTING PROVIDED A CUSHION IN THE AFTERNOON. THE MARKET IS EXPECTED TO BE VOLATILE IN THE NEAR FUTURE DUE TO AN INCREASED NUMBER OF SHORT TERM SPECULATORS AND FOREIGN INSTITUTIONS WHO ARE WAITING TO SELL INTO ANY SIGN OF STRENGTH. SINCE THE LAST NORMAL TRADING DAY ON 18 MAY, THE INDEX HAS NOW FALLEN BY SOME 28 PERCENT.
4. TRADING IN THE HANG SENG INDEX FUTURES MARKET REMAINED LIGHT. A TOTAL OF 1380 CONTRACTS WERE TRADED. THE JUNE CONTRACT CLOSED AT 2311 WITH A 44- POINT DISCOUNT TO THE SPOT MARKET. THE AUGUST CONTRACT CLOSED AT 2310 WITH A 45-POINT DISCOUNT TO THE SPOT MARKET. ONLY 253 CONTRACTS WERE TRADED FOR THIS MONTH. THERE WAS NO TRADING IN THE OCTOBER AND THE DECEMBER CONTRACTS. THE DISCREPANCY BETWEEN THE BID AND THE ASK PRICES WAS ABOUT 100 POINTS.
5. THE MONEY MARKET REMAINED STEADY TODAY WITH THE HONG KONG DOLLAR
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