XN000022-1987-10-27 — Page 3

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TUESDAY, OCTOBER 27, 1987

STATEMENT BY FINANCIAL SECRETARY

THE FOLLOWING STATEMENT WAS ISSUED TODAY (TUESDAY) BY THE FINANCIAL SECRETARY, MR PIERS JACOBS:

FURTHER SUPPORT FOR THE HONG KONG

FUTURES EXCHANGE HAS BERN CHINA, THE TWO HONG KONG

ARRANGED, TO BE PROVIDED BY THE BANK OF NOTE-ISSUING BANKS, AND THE HONG KONG GOVERNMENT.

THIS WILL TAKE THE FORM OF TWO FURTHER FACILITIES TOTALLING HK$2 BILLION. ONE FACILITY OF $1 BILLION WILL BE EQUALLY BY THE BANK OF CHINA, THE STANDARD CHARTERED BANK HONGKONG AND SHANGHAI BANKING CORPORATION.

TOGETHER

PROVIDED

AND THE

THE SECOND FACILITY OF HK$1 BILLION WILL BE PROVIDED BY THP HONG KONG GOVERNMENT FROM THE EXCHANGE FUND.

THESE TWO FACILITIES WILL BE USED TO SUPPLEMENT, IF REQUIRED THE PACKAGE ALREADY ARRANGED AND WILL BE DRAWN AND REPAID ON A LAST IN

LAST OUT BASIS.

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ALTHOUGH THE EXISTING PACKAGE HAS COVERED THE IMPACT OF YESTERDAY'S UPRECEDENTED FALL IN THE HANG SENG INDEX, AND A BALANCE REMAINS, PRUDENCE DICTATES THAT A SUBSTANTIAL OPERATIONAL MARGIN SHOULD BE PUT IN PLACE, AND TO ENSURE THE CONTINUING FUNCTION OF THE MARKETS IN THE FACE OF VOLATILE WORLD CONDITIONS.

THE NEW CHAIRMAN AND MANAGEMENT OF THE FUTURES EXCHANGE WILL ALSO BE IMPLEMENTATING TODAY VIGOROUS MEASURES DESIGNED TO STRENGTHEN AND IMPROVE REGULATION OF THE MARKET.

IN ADDITION, THE HONG KONG ASSOCIATION OF BANKS A FURTHER REDUCTION OF 1 PER CENT IN INTEREST RATE.

HAS ANNOUNCED

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NCNA DIRECTOR CALLS ON DEPUTY TO THE GOVERNOR

THE DIRECTOR OF THE HONG KONG BRANCH OF THE NEW CHINA NEWS AGENCY, MR XU JIATUN, CALLED ON THE DEPUTY TO THE GOVERNOR, MR DAVID FORD, TODAY (TUESDAY).

HE WAS ACCOMPANIED BY MR ZHANG XUEYAO, GENERAL MANAGER OF THE HONG KONG BRANCH OF THE BANK OF CHINA, AND BY MR JI SHAOXIANG, HEAD OF THE FOREIGN AFFAIRS DEPARTMENT OF THE NCNA.

MR FORD BRIEFED MR XU ON THE SITUATION IN THE HONG KONG STOCK AND FUTURES EXCHANGES AND EXPRESSED WARM THANKS FOR THE SUPPORT OF PRC FINANCIAL INSTITUTIONS, IN PARTICULAR FOR THE CONTRIBUTION OF THE BANK OF CHINA TO THE SECOND SUPPORT FACILITY FOR THE HONG KONG FUTURES GUARANTEE CORPORATION.