XN000022-1989-01-16 — Page 2

MONDAY, JANUARY 16, 1989

FS SEES SCOPE FOR VENTURE CAPITAL INDUSTRY

TO

HONG KONG HAS AN INDUSTRIAL ENVIRONMENT WHICH IS RECEPTIVE THE DEVELOPMENT OF MORE KNOWLEDGE AND CAPITAL INTENSIVE OPERATIONS, THE FINANCIAL SECRETARY. MR PIERS JACOBS, SAID TODAY (MONDAY).

SPEAKING AT THE OPENING OF THE ASIA-PACIFIC VENTURE CAPITAL CONFERENCE 1989 AT THE HONG KONG CONVENTION AND EXHIBITION CENTRE, MR JACOBS SAID THAT HONG KONG WAS "TECHNOLOGY-FRIENDLY" AND THIS BODED WELL FOR THE COMING OF AGE OF ITS VENTURE CAPITAL INDUSTRY,

TRACING THE DEVELOPMENT OF VENTURE CAPITAL FINANCING IN HONG KONG, HE SAID IT WAS A COMPARATIVELY NEW CONCEPT HERE.

"WITH THE GROWING REALISATION THAT THE UPGRADING OF THE MANUFACTURING SECTOR IN HONG KONG IS NECESSARY IF WE ARE TO MAINTAIN OUR COMPETITIVENESS IN THE INTERNATIONAL ARENA, MANY LOCAL MANUFACTURERS HAVE BEGUN TO FOCUS ON THE AVAILABILITY OF A METHOD OF EQUITY FINANCING WHICH COULD HELP IN PROJECTS WHICH REQUIRE LONGER START-UP AND PAYBACK PERIODS," MR JACOBS SAID.

MANY OF THESE PROJECTS WERE IMAGINATIVE AND INNOVATIVE, AND OFTEN THERE WERE GOOD PROSPECTS FOR FURTHER DEVELOPMENT.

"BUT THE INITIAL RISK IS USUALLY HIGH. AS A RESULT, IT IS SOMETIMES DIFFICULT TO OBTAIN CONVENTIONAL FINANCING FROM BANKS AND FINANCIAL INSTITUTIONS.

"HOWEVER, IF WE ARE TO CONTINUE ΤΟ ATTRACT NEW TECHNOLOGIES AND PRODUCTION PROCESSES TO HONG KONG, IT IS CLEARLY DESIRABLE THAT THESE PROJECTS BE PROPERLY SUPPORTED, HE SAID.

||

MR JACOBS NOTED THAT A WORKING PARTY HAD BEEN FORMED BY THE HONG KONG ASSOCIATION OF BANKS IN NOVEMBER 1986 ΤΟ ASSESS THE SUITABILITY OF THE BUSINESS ENVIRONMENT FOR THE FURTHER DEVELOPMENT OF THE VENTURE CAPITAL INDUSTRY.

THE

TO

AS A RESULT OF ONE OF THE WORKING PARTY'S RECOMMENDATIONS, HONG KONG VENTURE CAPITAL ASSOCIATION WAS FORMED IN NOVEMBER 1987 FACILITATE THE FLOW OF INFORMATION REGARDING VENTURE CAPITAL AMONG ITS MEMBERS AND BETWEEN

AND OUTSIDE PARTIES WHO MIGHT BE INTERESTED.

ITSELF

THE ASSOCIATION HLAD ATTRACTED 25 FULL MEMBERS ASSOCIATE MEMBERS SINCE ITS ESTABLISHMENT.

AND

25

THIS IS A CLEAR INDICATION OF THE GROWING INTEREST IN AND VITALITY OF THE LOCAL VENTURE CAPITAL INDUSTRY, HE SAID.

**

/MR JACOBS