XN000022-1992-08-28 — Page 5

FRIDAY, AUGUST 28, 1992

RENTALS

HELD

IN THE MARKET FOR SHOPPING SPACE. PRICES AND STEADY, EXCEPT FOR THE PRIME LOCATIONS WHERE DEMAND STRENGTHENED AS A BUSINESS. RESULT OF A PICK-UP IN LOCAL CONSUMER SPENDING AND TOURIST

AGAINST AN ABUNDANT SUPPLY, THE DEMAND FOR OFFICE SPACE

LOCATIONS, IMPROVED WITH A SLIGHT RECOVERY IN RENTALS IN SOME THE

SALES MARKET FOR OFFICE SPACE PERFORMED FAIRLY WELL.

THE DEMAND FOR FLATTED FACTORY SPACE VARIED AMONGST BUT THE MARKET REMAINED GENERALLY SLACK.

WHILE

LOCATIONS

IN THE

FINANCIAL

THE SECTOR,

WERE FOLLOWING DEVELOPMENTS

MARKET FIRST, THE

EXCHANGE OBSERVED DURING THE FIRST HALF OF 1992.

KONG DOLLAR RATE OF THE HONG

AGAINST THE U.S. DOLLAR REMAINED

DUE

AN ΤΟ GENERALLY STABLE UNDER THE LINKED EXCHANGE RATE SYSTEM.

BY FOR HONG KONG DOLLARS CAUSED IN PART

AN INFLOW INCREASED DEMAND

THE EXCHANGE RATE OF OF FOREIGN FUNDS INTO THE LOCAL STOCK MARKET, THE HONG KONG DOLLAR STRENGTHENED

THE SECOND CLOSING SLIGHTLY,

SMALL QUARTER AT HK$7.732 TO US$1. THIS, HOWEVER, REPRESENTED ONLY A DEVIATION FROM THE LINKED EXCHANGE RATE OF 7.80.

DOLLAR AGAINST SECONDLY, REFLECTING THE MOVEMENTS OF THE U.S.

TRADE OTHER MAJOR CURRENCIES DURING THE FIRST HALF OF THE YEAR, THE

UP FROM WEIGHTED EXCHANGE RATE INDEX OF THE HONG KONG DOLLAR EDGED

FALLING 109.2 AT THE END OF 1991 TO AROUND 113.0 IN MID-APRIL, BEFORE BACK TO 110.2 AT THE END OF JUNE 1992.

FOLLOWING THE EASING IN INTERBANK INTEREST RATES, DEPOSIT RATES TWICE ADMINISTERED BY THE HONG KONG ASSOCIATION OF BANKS WERE LOWERED ACROSS-THE-BOARD DURING THE MONTH OF MAY.

THIRDLY, PARTLY

DOLLAR

DUE TO AN INFLOW OF FUNDS, HONG KONG

HAVING DEPOSITS RECORDED A MARKED INCREASE DURING THE SECOND QUARTER, DECLINED MARGINALLY DURING THE FIRST QUARTER. THE BROADER DEFINITIONS OF THE HONG KONG DOLLAR MONEY SUPPLY, HK$M2 AND HK$M3, GREW BY 22% AND SOMEWHAT FASTER 20% RESPECTIVELY IN JUNE 1992 OVER A YEAR EARLIER, THAN THE GROWTH RATE OF NOMINAL GDP.

MEANWHILE, HONG KONG DOLLAR LOANS AND ADVANCES ROSE MORE SLOWLY THAN HONG KONG DOLLAR DEPOSITS DURING THE SECOND QUARTER.

THE HANG FOURTHLY, THE STOCK MARKET SHOWED A STRONG RALLY,

THE SENG INDEX HIT A RECORD HIGH OF 6.113 ON JUNE 26, BEFORE CLOSING SECOND QUARTER AT 6,104, 1,807 POINTS OR 42% HIGHER THAN AT THE END OF 1991. THIS GAIN CONSIDERABLY OUTPERFORMED THOSE IN THE MARKETS OVERSEAS.

FIFTHLY,

MONETARY ON

MANAGEMENT, A

LIQUIDITY

FACILITY WAS INTRODUCED IN JUNE TO ASSIST LICENSED BANKS LATE ADJUSTMENTS TO THEIR LIQUIDITY POSITIONS.

MAJOR STOCK

ADJUSTMENT IN MAKING

FORECASTS

THE GOVERNMENT ECONOMIST SAID THAT THE GDP AND PRICE FOR 1992 WERE REVIEWED BY INDIVIDUAL COMPONENTS IN THE LIGHT OF THESE DEVELOPMENTS AND THE SHORT-TERM OUTLOOK FOR THE ECONOMY, FORECASTS ARE SHOWN IN THE TABLE ANNEXED.

THE UPDATED

/IN THE