XN000022-1992-07-06 — Page 3

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MONDAY, JULY 6, 1992

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"A NUMBER OF FINANCIAL INSTITUTIONS IN HONG KONG ARE ENGAGED ACTIVELY IN THE UNDERWRITING AND PLACEMENT OF THESE STOCKS AND ALSO PARTICIPATE IN THE CLEARING AND SETTLEMENT SYSTEM, HE SAID, ADDING THAT THE SECURITIES AND FUTURES COMMISSION HAD SINCE APRIL THIS YEAR APPROVED NO FEWER THAN FIVE CHINA FUNDS UNDER THE PRESENT CODE ON UNIT TRUSTS AND MUTUAL FUNDS.

ON THE QUESTION OF LISTING OF CHINA'S B SHARES IN HONG KONG, MR MACLEOD SAID IT WAS CURRENTLY UNDER CONSIDERATION, BUT IT MAY TAKE SOME TIME TO RESOLVE THE VARIOUS ISSUES WHICH NEEDED TO BE ADDRESSED.

"MEANWHILE, THE STOCK EXCHANGE OF HONG KONG HAS FORMED A CHINA STUDY GROUP TO RESEARCH INTO THE ROLE OF THE EXCHANGE IN FOSTERING GREATER CAPITAL FORMATION IN BOTH THE HONG KONG AND CHINA MARKETS.

"THERE IS NO DOUBT THAT FUND RAISING BY CHINESE ENTERPRISES WILL ADD A SIGNIFICANT DIMENSION TO THE GROWTH OF OUR MARKETS OVER THE COMING YEARS, HE SAID.

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EMPHASISING THAT THE JOINT DECLARATION SIGNED BY BRITAIN AND CHINA IN 1984 CLEARLY PROVIDED THAT HONG KONG WOULD RETAIN THE STATUS OF AN INTERNATIONAL FINANCIAL CENTRE BEYOND 1997, MR MACLEOD TOLD CONFERENCE PARTICIPANTS THAT ALL ELEMENTS OF THE PRESENT FINANCIAL · SYSTEM, AND CAPITALIST AND FREE MARKET WAY OF LIFE WOULD REMAIN IN PLACE.

"NOW, AS WE PREPARE FOR THE TRANSFER OF SOVEREIGNTY TO CHINA IN FIVE YEARS' TIME, WE ARE PLANNING CONFIDENTLY FOR THE FUTURE, HE SAID, MENTIONING IN PARTICULAR THE AIRPORT CORE PROGRAMME.

"THE CENTRE-PIECE OF THIS PROGRAMME IS, OF COURSE, A NEW AIRPORT. IT ALSO INCLUDES AN AIRPORT RAILWAY, WHICH WILL FORM PART OF THE SYSTEM OF OUR HIGHLY SUCCESSFUL MASS TRANSIT RAILWAY CORPORATION A SIGNIFICANT INTERNATIONAL BORROWER OF FUNDS WHOSE HIGH CREDIT RATING IS WELL KNOWN," HE SAID.

TALKS ARE PROCEEDING WITH CHINA ON THE FINANCIAL PLANS OF THE AIRPORT AUTHORITY AND THE MASS TRANSIT RAILWAY CORPORATION BECAUSE THESE INVOLVED COMMITMENTS THAT CONTINUE AFTER 1997, MR MACLEOD SAID.

"WHILST THESE TALKS HAVE BEEN GOING ON, WE HAVE BEEN MAKING GOOD PROGRESS ON THE PHYSICAL FRONT," HE ADDED.

MR MACLEOD SAID THE PRIVATE SECTOR WAS PLAYING A SIGNIFICANT ROLE IN THE PROJECTS AND WOULD ACCOUNT FOR JUST OVER 50 PER CENT OF THE FINANCING THROUGH COMMERCIAL LENDING TO THE AIRPORT AUTHORITY AND MASS TRANSIT RAILWAY CORPORATION, PLUS INVESTMENTS IN FRANCHISES RANGING FROM FACILITIES AT THE AIRPORT TO A NEW ROAD TUNNEL UNDER HARBOUR KNOWN AS THE WESTERN HARBOUR CROSSING.

THE

"THE MASS TRANSIT RAILWAY CORPORATION AND THE AIRPORT AUTHORITY IN DUE COURSE,

APPROACHING THE MARKET WITH FINANCING

WILL, PROPOSALS.

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