share prices over the last few months, the liquidity of
the Hong Kong market (with its one-day settlement
system), and the market's perception of Hong Kong as particularly vulnerable to global recession caused by
higher oil prices.
A number of financial institutions in Hong Kong exercised caution in their dealings with Kuwaiti assets
on 6 August, seeking confirmation that the instructions,
emanating from London, were in order under the UK Freeze
Directions. Indeed market turnover on 6 August was lower than that on either 7 or 8 August when the Hong Kong Freeze Order was in place. As you will no doubt know,
virtually all the selling orders emanated from the Kuwait
Investment office in London. The Hong Kong Government
were also aware of this and drew it to the immediate
attention of the Bank of England.
You also mentioned that overseas registered companies like Jardines had been prevented by the listing rules of the Hong Kong Stock Exchange from buying back their own shares. The Hong Kong Government do not accept that the listing rules of the Hong Kong Stock Exchange
amount to an assertion of extra-territorial jurisdiction.
It is not unreasonable that, in the interests of investors, all companies with their principal listing in Hong Kong should abide by the listing rules of the Stock
Exchange, so that the same ground rules apply to all stocks and shares listed in Hong Kong.
It is certainly the case that buying back is
presently prohibited in the Hong Kong Stock Exchange. understand, however, that new rules concerning the
buy-back of shares are currently being formulated. these new buy-back provisions have been finalised, they
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