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166005
MDHIAN 8076
HKC100/1
TOP COPY Q DIST ?
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FM HONG KONG
TO IMMEDIATE FCO
TELNO 1886
OF 071015Z JUNE 89
INFO IMMEDIATE WASHINGTON, PEKING
STATE OF HONG KONG MARKET 7 JUNE 1989
SUMMARY
1. THE HANG SENG INDEX CLOSED 75 POINTS UP ON VOLATILE TRADING.
THE MONEY MARKET REMAINED STABLE WITH THE HONG KONG DOLLAR
EASING TO 7.798 TO THE US DOLLAR.
DETAILS
2. FOLLOWING THE 56 POINT RISE YESTERDAY, THE HANG SENG INDEX ROSE 45 POINTS IN THE FIRST HALF HOUR OF TRADING TODAY. THE
INDEX CONTINUED TO RISE THROUGHOUT THE MORNING, REACHING A HIGH OF 2299, BEFORE SETTLING TO CLOSE AT 2270 FOR THE MORNING. IN THE AFTERNOON, THE INDEX SLIDED TO CLOSE AT 2224. THE TOTAL GAIN FOR THE DAY WAS 75 POINTS WITH A TURNOVER OF HKD 2.31 BILLION.
3. NEWS THAT A HUGE MILITARY CONVOY WAS LEAVING BEIJING BOOSTED
THE MARKET IN THE MORNING. SENTIMENTS CHANGED IN THE AFTERNOON ON
FURTHER NEWS THAT TROOPS HAD SURROUNDED THE DIPLOMATIC COMPOUND.
TRADING HAD BEEN VOLATILE AND THE TRADING RANGE SPREADED OVER 150 POINTS. SINCE THE LAST NORMAL TRADING DAY ON 18 MAY, THE INDEX HAS NOW FALLEN BY SOME 1,000 POINTS, REPRESENTING A TOTAL LOSS OF 32 PER CENT.
4. TRADING IN THE HANG SENG INDEX FUTURES MARKET INCREASED TODAY.
A TOTAL OF 2424 CONTRACTS WERE TRADED. THE JUNE CONTRACT CLOSED
AT 2140 WITH A 84-POINT DISCOUNT TO THE SPOT MARKET. THE AUGUST
CONTRACT CLOSED AT 2150 WITH A 74-POINT DISCOUNT TO THE SPOT MARKET. ONLY 183 CONTRACTS WERE TRADED FOR THIS MONTH. THERE WAS
NO TRADING IN THE OCTOBER AND THE DECEMBER CONTRACTS.
5. THE MONEY MARKET REMAINED STEADY TODAY WITH THE HONG KONG DOLLAR EASING TO 7.798 TO THE US DOLLAR. INTEREST RATES REMAINED ABOVE
THE CURRENT PRIME RATE OF 11.5 PER CENT. OVERNIGHT INTER-BANK
INTEREST RATE WAS OVER 12 PER CENT.
WILSON
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