FRIDAY, SEPTEMBER 18, 1992
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"ALTERING THE RATIO OF EQUITY TO DEBT
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THERE IS NO MAGIC
RIGHT ANSWER TO THE PROPORTION BETWEEN EQUITY AND DERT.
"EQUITY OF COURSE IS NOT SINFLY MONEY PUT INTO THE CORPORATIONS WHICH THEN DISAPPEARS FOREVER AND DOESN'T PRODUCE ANY BENEFITS IN INVESTMENT WHICH PRODUCES DIVIDENDS.
"IN THE CASE OF THE INCREASED EQUITY WHICH WE PROPOSED IT PRODUCES DIVIDENDS VERY MUCH QUICKER THAN THE ORIGINAL PACKAGE. THAT'S A BENEFIT TO THE SAR GOVERNMENT IN FACT, HE SAID.
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ON THE SUGGESTION THAT HONG KONG SHOULD NOT USE THE LAND FUND BELONGS TO THE FUTURE SAR GOVERNMENT, HE POINTED OUT THAT THE PROVISIONS RELATING TO THE LAND FUND WERE VERY CLEAR.
WHICH
**THEY DO ALLOW FOR THE LAND FUND TO BE USED BEFORE 1997 FOR DEVELOPMENT PROJECTS IN HONG KONG. THERE IS NO QUESTION ABOUT THAT.
"IT DOES PROVIDE FOR THAT AND REMEMBER THIS ARRANGEMENT WILL BE PRODUCING REVENUE WHICH THE LAND FUND WOULD NOT OTHERWISE HAVE GOT.
"SO THE SAR GOVERNMENT'S INHERITANCE AS IT WERE FROM THE LAND FUND WON'T IN FACT BE AFFECTED AND IT WILL GET THE BENEFIT OF THE EARLIER DIVIDENDS FROM THE TWO CORPORATIONS. SO I DON'T THINK THERE IS ANY PROBLEM THERE, MR MACLEOD SAID.
WHEN ASKED ABOUT THE LIKELY REACTION OF BEIJING TO THE NEW PROPOSALS, HE SAID WE WERE HERE RESPONDING TO A CHINESE SUGGESTION.
"WE ARE DECLARED CONCERNS. ANSWER," HE SAID.
RESPONDING IN A WAY WHICH WE THINK MEETS THE IR SO I WOULD BE SURPRISED IF IT DOESN'T GET POSITIVE
COMMENTING
ON THE RECENT CONDITIONS IN FOREIGN EXCHANGE AND MONEY MARKETS IN EUROPE, HE SAID: "PEOPLE HAVE ASKED QUITE UNDERSTANDABLY WHAT MAY THAT MEAN FOR HONG KONG. THE FOCUS OF SPECULATION IS OF COURSE ON EUROPEAN CURRENCIES AND IN PARTICULAR THE WEAKER EUROPEAN CURRENCIES.
"THERE IS NO REASON FOR IT TO SPREAD BEYOND THAT AND IT HAS
NOT SPREAD TO THE HONG KONG DOLLAR.
"HONG KONG DOLLAR IS ACTUALLY SLIGHTLY STRENGTHENED TODAY. WE OF COURSE HAVE NOT ONLY A STRONG CURRENCY, WE HAVE A LINK WHICH IS WORKING VERY WELL, WE ALSO HAVE A STRONG ECONOMY. SO, THAT IS NOT A MATTER OF MUCH CONCERN."
ON HIS MEETING WITH MRS CARLA HILLS, THE U.S. TRADE REPRESENTATIVE, DURING HIS VISIT TO THE STATES, MR MACLEOD SAID HE WOULD CERTAINLY BE FOCUSING MAINLY ON THE PROBLEMS OF U.S./CHINA TRADE RELATIONS AS THEY AFFECT HONG KONG.
"THE U.S. ADMINISTRATION [ MUST SAY IS VERY AWARE OF OUR SITUATION, OF OUR CONCERNS, BUT I THINK IT USEFUL TO REITERATE THEM AT THIS PARTICULAR TIME," HE SAID.
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