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WEDNESDAY, NOVEMBER 6, 1991
RESOLUTION UNDER LOANS ORDINANCE MOVED
THE SECRETARY FOR MONETARY AFFAIRS, MR DAVID NENDICK, TODAY
A MOTION (WEDNESDAY) MOVED
UNDER THE LOANS ORDINANCE IN THE LEGISLATIVE COUNCIL.
THE MOTION IS AIMED TO PROVIDE THE GOVERNMENT WITH AUTHORITY TO BORROW IN HONG KONG FOR THE PURPOSES OF THE CAPITAL WORKS RESERVE FUND OR THE CAPITAL INVESTMENT FUND SUMS NOT EXCEEDING HK$5 BILLION IN TOTAL.
MR NENDICK SAID THAT ON MARCH 6 THIS YEAR, THE FINANCIAL
SPEECH FOR SECRETARY MENTIONED IN HIS BUDGET
1991/92 THAT A WELL STRUCTURED AND MANAGED BORROWING PROGRAMME THROUGH THE ISSUE OF SHORT- TERM GOVERNMENT BONDS WOULD BE APPROPRIATE FOR HONG KONG.
HE ALSO MENTIONED THAT THE PROCEEDS OF THE BORROWING WOULD BE USED ONLY FOR CAPITAL PROJECTS.
PROGRAMME
"DETAILS OF THE PROGRAMME HAVE NOW BEEN WORKED OUT AND THESE
INFORMATION ARE DESCRIBED IN THE
MEMORANDUM ALREADY CIRCULATED TO MEMBERS, HE SAID.
וה
MR NENDICK SAID THE DIRECTOR OF THE OFFICE OF THE EXCHANGE FUND WOULD BE THE ISSUING AGENT OF GOVERNMENT BONDS.
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INITIALLY AROUND HK$500 MILLION OF TWO-YEAR BONDS WOULD BE ISSUED FOUR TIMES A YEAR THROUGH OPEN TENDERS ON A BID-PRICE BASIS.
OF
MILLION IN ADDITION, BONDS UP TO HK$100
PER ISSUE MIGHT BE MADE AVAILABLE TO THE OFFICE OF THE EXCHANGE FUND FOR THE PURPOSES LAST RESORT SUPPLY TO MARKET MAKERS.
"THE BOND PROGRAMME WILL,
THEREFORE, BUILD UP ΤΟ HK$4.8 TWO YEARS BILLION, OR SAY, HK$5 BILLION, IN
TIME COMPRISING ISSUES OF HK$600 MILLION EACH," THE SECRETARY EXPLAINED.
MR MARKET,
MARKET
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NENDICK
IN ORDER TO MAINTAIN A LIQUID SECONDARY SAID A NUMBER OF AUTHORISED INSTITUTIONS UNDER THE SUPERVISION OF THE COMMISSIONER OF BANKING WOULD BE APPOINTED AS
MAKERS WHICH WOULD QUOTE BID AND OFFER PRICES FOR THE BONDS.
LIQUIDITY OF
TO FURTHER ENHANCE
THE MARKET, MARKET MAKERS SUBJECT WOULD BE ALLOWED TO RUN SHORT POSITIONS IN ANY ISSUE OF BONDS
MANAGEMENT MEASURES TO THEIR COMPLIANCE WITH THE RISK
SPECIFIED BY THE DIRECTOR OF THE OFFICE OF THE EXCHANGE FUND.
A LIQUID SECONDARY MARKET WOULD HELP TO
PROGRAMME то INVESTORS AND ATTRACTIVENESS OF THE BOND BORROWING COST OF GOVERNMENT, MR NENDICK ADDED.
THE ENHANCE
REDUCE THE
MR NENDICK POINTED OUT THAT THE BONDS WOULD LIQUEFIABLE ASSETS UNDER THE BANKING ORDINANCE.
QUALIFY
AS
/"INTEREST INCOME