XN000022-1980-11-27 — Page 3

THURSDAY, NOVEMBER 27, 1980

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FINANCIAL SECTOR

THE REPORT INDICATES THAT THE GROWTH RATES OF THE MONEY SUPPLY AND OF TOTAL LOANS AND ADVANCES IN HONG KONG EXTENDED EY BANKS AND DEPOSIT-TAKING COMPANIES SLOWED DOWN IN THE THIRD QUARTER ALTHOUGH THEY WERE STILL FAIRLY RAPID.

IT CLAIMS THE MODERATE WEAKENING OF THE EXCHANGE RATE OF THE HONG KONG DOLLAR DURING THE THIRD QUARTER WAS AT LEAST PARTLY CAUSED BY THE WIDENING DIFFERENTIALS BETWEEN

INTEREST RATES IN HONG KONG AND THOSE FOR THE US DOLLAR.

THIS DEVELOPMENT AND THE INCREASINGLY TIGHT LOCAL MONEY MARKET WERE THE REASON FOR THE INCREASE IN INTEREST RATES IN SEPTEMBER.

LABOUR SECTOR

THE REPORT REFRAINS FROM MAKING A DEFINITIVE VIEW, AS STATISTICS REFERRING TO SEPTEMBER WERE NOT YET AVAILABLE.

NEVERTHELESS, IT EXPECTS THAT, BECAUSE OF A RAPID INCREASE IN THE SUPPLY OF LABOUR AS A RESULT OF IMMIGRATION. THERE WAS INCREASING UNEMPLOYMENT AND A SLOWING DOWN IN THE RATE OF INCREASE IN WAGE RATES.

PRODUCTION

THE REPORT SUGGESTS INCREASING UNCERTAINTY ABOUT THE IMMEDIATE PROSPECTS FOR THE MANUFACTURING SECTOR (ALTHOUGH ELECTRICITY CONSUMPTION CONTINUED TO INCREASE SUBSTANTIALLY FOR THE MAJOR MANUFACTURING INDUSTRIES OTHER THAN TEXTILES AND TOYS).

IT ALSO DISCUSSES CONDITIONS IN THE PROPERTY MARKET. MAKING USE OF FIGURES ON BUILDINGS COMPLETED, THE REPORT NOTES THAT THERE WAS A SUBSTANTIAL ADDITION TO THE SUPPLY OF NEW OFFICE AND SHOP SPACE.

THERE WAS A CONTINUATION OF KEENER INTEREST IN COMMERCIAL PROPERTY AS AGAINST RESIDENTIAL AND INDUSTRIAL PROPERTY, BUT THE REPORT POINTS OUT THAT AN INCREASE IN DEMAND IN THE THIRD QUARTER CAUSED PURCHASE PRICES OF RESIDENTIAL PROPERTY TO RISE RAPIDLY, ALTHOUGH RENTALS HAVE STABILIZED AS A CONSEQUENCE OF RENT CONTROL. AS TO ACTIVITY IN THE BUILDING AND CONSTRUCTION SECTOR, THE REPOST POINTS OUT THAT THERE WAS A DECLINE IN PRODUCTIVITY 43 A RESULT OF CONTINUING RECRUITMENT OF UNSKILLED AND INEXPERIENCED LABOU,

FICES