XN000022-1973-10-17 — Page 83

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Wednesday, October 17, 1973

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It has been a year of exceptional difficulty for our exporters, our

business men, our bankers and developers.

Let me remind you of a few.

The rise and fall of our stock market was a sad and basically very

dangerous phenomenon which has left deep scars. It would have brought a less

robust economy to its knees. There was an immediate loss of confidence in

the market both local and international, and this is only gradually recovering,

I think all investors are agreed that in this instance laissez-faire has produced

excessive risks both for individuals and for Hong Kong, and I am sure that the

introduction of disciplines having the force of law is an essential step on

the road to full recovery.

I should like to express my thanks for the devoted work of the

Securities Advisory Council under the very able chairmanship of Mr. Y.H. Kan,

and also of Kr. Selwyn, the Commissioner for Securities. The draft legislation

which is the fruit of their labours will be placed before this Council very

shortly. No doubt Honourable Members will wish to look closely at the

details.

It would be surprising if there were not room for improvement in

such massive drafts. But with the safeguards that legislation can provide

for investors and with market values bearing a much more attractive price

earnings ratio, and with good prospects for growth in the economy, I think we

can look forward to brighter days ahead. It is clear from what has been said

to me in the City of London and by visiting financiers, that while the

phenomenon of the rise and fall was a temporary deterrent to overseas investors,

the fact that the economy has been able to weather such a shock has made a

very favourable impression.

I note