XN000022-1988-05-25 — Page 23

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WEDNESDAY, MAY 25, 1988

THE REPORT POINTS OUT THAT THE GROWTH

RATE OF THE VALUE OF TOTAL EXPORTS WAS HIGHER THAN THAT OF IMPORTS IN THE FIRST QUARTER OF 1988 OVER A YEAR BARLIER.

AS A RESULT, A SMALLER VISIBLE TRADE DEFICIT OF $1,829 MILLION, EQUIVALENT TO 1.9 PER CENT OF THE VALUE OF IMPORTS, WAS RECORDED IN THE FIRST QUARTER OF THIS YEAR, COMPARED WITH A DEFICIT OF $3,353 MILLION, EQUIVALENT TO 4.3 PER CENT OF THE VALUE OF IMPORTS, RECORDED IN THE SAME QUARTER LAST YEAR.

ON THE FINANCIAL SECTOR, THE REPORT NOTES THE FOLLOWING DEVELOPMENTS.

INTO THE HONG KONG

BEGINNING OF 1988,

FIRST, THE SPECULATIVE INFLOW OF FUNDS DOLLAR, WHICH PUSHED THE MARKET EXCHANGE RATE OF THE LOCAL CURRENCY ABOVE THE LINKED RATE IN LATE 1987 AND AT THE LARGELY SUBSIDED TOWARDS THE END OF JANUARY.

MAINLY REFLECTING THIS, THE GROWTH IN DEPOSITS AND IN THE HONG KONG DOLLAR MONEY MARKEDLY DURING THE FIRST QUARTER.

HONG KONG DOLLAR SUPPLY SLOWED DOWN

SECONDLY, LOCAL INTEREST RATES EDGED UP GRADUALLY, REDUCING THE DIFFERENTIAL BETWEEN THE HONG KONG DOLLAR AND THE U.S. DOLLAR INTEREST RATES.

THIRDLY, THE LOCAL STOCK MARKET WAS GENERALLY STABLE DURING THE FIRST QUARTER, WITH A MODEST RALLY IN MARCH. TRADING WAS STILL SUBDUED COMPARED WITH THE LEVEL BEFORE OCTOBER 1987.

FOURTHLY, THE CAPITAL MARKET SAW A SURGE IN ACTIVITY IN THE FIRST QUARTER, AS THE LOW LOCAL INTEREST RATES PROVIDED A FAVOURABLE ENVIRONMENT FOR THE ISSUE OF FIXED-RATE DEBT INSTRUMENTS.

ON THE LABOUR SECTOR, THE REPORT NOTES THAT WHILE EMPLOYMENT IN THE MANUFACTURING SECTOR SHOWED LITTLE CHANGE BETWEEN DECEMBER 1986 AND DECEMBER 1987, EMPLOYMENT IN FINANCIAL AND RELATED BUSINESS SERVICES, IN THE WHOLESALE, RETAIL AND IMPORT/EXPORT TRADES, AND IN TRANSPORT SERVICES RELATED TO EXTERNAL TRADE INCREASED SIGNIFICANTLY.

EMPLOYMENT ON BUILDING AND CONSTRUCTION SITES ALSO SHOWED SOME INCREASE OVER THE SAME PERIOD.

REFLECTING TIGHT LABOUR MARKET CONDITIONS, THE NUMBER OF VACANCIES IN ALL MAJOR SECTORS INCREASED SUBSTANTIALLY IN DECEMBER 1987 OVER A YEAR EARLIER.

/COMPARING DECEMBER .....