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MONDAY, NOVEMBER 2, 1987
HOPEFUL SIGNS CONFIDENCE HAS BEEN
RESTORED TO MARKETS
—
NENDICK
THERE ARE HOPEFUL 'SIGNS THAT THE MEASURES THAT HONG KONG HAS TAKEN AND THOSE TAKEN IN OTHER MAJOR FINANCIAL CENTRES HAVE BEEN SUCCESSFUL IN RESTORING CONFIDENCE TO THE MARKET PLACE, THE SECRETARY FOR MONETARY AFFAIRS, MR DAVID NENDICK, SAID TODAY (MONDAY).
THOUGH THERE WAS STILL WORK TO BE DONE IN ENSURING THAT THE RECENT EVENTS DID NOT RECUR, APPROPRIATE RESPONSES MIGHT NOW BE WORKED OUT IN A CAREFUL AND ORDERLY FASHION WITHOUT EVENTS LEADING TO HASTY OR ILL-CONSIDERED MEASURES, WHEN OPENING AN ASIAN BANKERS ASSOCIATION SEMINAR.
IN PUTTING EVENTS OF THE PAST STRESSED THAT THE CRISIS OF CONFIDENCE MARKETS MUST BE SEEN AS UNPARALLELLED IN ALL WHO WERE ATTENDING THE SEMINAR.
THE PRESSURE OF MR NENDICK SAID
TWO WEEKS IN WHICH SPREAD THE LIFETIME
CONTEXT, HE ACROSS WORLD OF VIRTUALLY
CONTAINED AND
"THANKFULLY, THE POSITION NOW SEEMS TO BE CONFIDENCE IS RETURNING TO MARKETS, BUT A MAJOR LESSON WHICH I HOPE WILL BE LEARNED FROM THIS EXPERIENCE IS THE EXTENT TO WHICH INTERNATIONAL FINANCIAL MARKETS ARE INTER-RELATED..
"REMEDIAL MEASURES MUST BE TAKEN IN ALL THE
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THEY ARE TO PROVE LASTING, HE SAID.
MAJOR CENTRES IF
MR NENDICK NOTED THAT HONG KONG HAD ATTRACTED SOME INTERNATIONAL AND LOCAL CRÍTICISM FOR CLOSING ITS FINANCIAL MARKETS BUT, EQUALLY, THERE WERE THOSE AT HOME AND ABROAD WHO SUPPORTED THE MOVE.
HE SAID: "THE DECISION TO SUSPEND TRADING WAS TAKEN AGAINST A BACKGROUND OF A VERY SUBSTANTIAL BACKLOG OF SETTLEMENTS IN THE STOCK EXCHANGE FOLLOWING A PERIOD OF UNPRECEDENTED TURNOVER, AND OF THE LIKELIHOOD, IN THE PARTICULAR CIRCUMSTANCES OF HONG KONG, THAT HIGHLY VOLATILE AND DISORDERLY TRADING CONDITIONS WOULD EMERGE IF INVESTORS ACTED PRECIPITATELY.
"A PAUSE FOR WISER COUNSELS TO PREVAIL WAS SEEN AS VALUABLE. I AM GLAD TO SAY THAT, WHEN THE MARKET REOPENED, THE GENERAL PUBLIC DID REACT IN A SENSIBLE AND LEVEL HEADED MANNER, AND THERE WAS NO WHOLE- SALE ENCASHMENT OF UNIT TRUSTS OR PANIC ATTEMPTS TO REALISE STOCK EXCHANGE INVESTMENTS.
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то
MR NENDICK SAID HE SAW THIS, OF ITSELF, AS A SIGNIFICANT JUSTIFICATION FOR THE SUSPENSION OF TRADING, BUT, WITH HINDSIGHT, CLOSING OF THE EXCHANGE ALSO BROUGHT VALUABLE BREATHING SPACE ARRIVE AT A SOLUTION TO A DIFFICULTY CENTRING ON THE FINANCIAL FUTURES MARKET, WHICH ONLY EMERGED AFTER TRADING HAD BEEN SUSPENDED.
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