XN000022-1993-11-26 — Page 7

FRIDAY, NOVEMBER 26, 1993

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ON SHOPPING SPACE, PRICES AND RENTALS SHOWED FURTHER INCREASES IN THE THIRD QUARTER AS DEMAND REMAINED STRONG AMIDST THE STEADY GROWTH IN TOURIST AND LOCAL CONSUMER SPENDINGS.

ON INDUSTRIAL PROPERTY, OVERALL DEMAND CONTINUED TO BE DAMPENED BY THE ON-GOING RELOCATION OF MANUFACTURING PROCESSES ACROSS THE BORDER.

PRICES AND RENTALS REMAINED SOFT IN THE THIRD QUARTER, EXCEPT FOR THOSE OF MODERN MULTI-PURPOSE INDUSTRIAL BUILDINGS WHERE INTEREST WAS CONCENTRATED MORE IN OFFICE USE.

IN THE FINANCIAL SECTOR, THE FOLLOWING DEVELOPMENTS WERE OBSERVED DURING THE THIRD QUARTER OF 1993.

FIRST, THE MARKET EXCHANGE RATE OF THE HONG KONG DOLLAR AGAINST THE U.S. DOLLAR REMAINED GENERALLY STABLE UNDER THE LINKED EXCHANGE RATE SYSTEM, MOVING BETWEEN HK$7.731 AND HK$7.761 TO U.S.$1.

AT THE END OF THE THIRD QUARTER, THE MARKET EXCHANGE RATE STOOD AT HK$7.737 TO U.S.$1.

SECONDLY, REFLECTING THE MOVEMENTS OF THE U.S. DOLLAR AGAINST OTHER MAJOR CURRENCIES, THE EFFECTIVE EXCHANGE RATE INDEX OF THE HONG KONG DOLLAR MOVED WITHIN A NARROW RANGE OF 112-113 DURING THE THIRD QUARTER.

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APART FROM THE IMPACT OF AD HOC EVENTS SUCH AS THE SEVERAL SHARE ISSUES, LOCAL MONEY MARKET INTEREST RATES GENERALLY MOVED CLOSELY IN LINE WITH THE CORRESPONDING U.S. DOLLAR INTEREST RATES.

DEPOSIT RATES ADMINISTERED BY THE HONG KONG ASSOCIATION BANKS REMAINED UNCHANGED DURING THE THIRD QUARTER.

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THIRDLY, HONG KONG DOLLAR DEPOSITS RECORDED SOLID GROWTH DURING THE THIRD QUARTER, FOLLOWING ONLY A MARGINAL INCREASR DURING THE SECOND QUARTER.

GROWTH IN THE BROADER DEFINITIONS OF THE HONG KONG DOLLAR MONEY SUPPLY, HK$M2 AND HK$M3, AT 16.5% AND 15.3% RESPECTIVELY IN SEPTEMBER 1993 OVER A YEAR EARLIER, REMAINED BROADLY IN LINE WITH THE GROWTH NOMINAL GDP.

IN

MEANWHILE, LOANS AND ADVANCES FOR USE IN HONG KONG CONTINUED TO SHOW A STEADY INCREASE IN OVERALL TERMS DURING THE THIRD QUARTER.

FOURTHLY, THE LOCAL STOCK MARKET HAD OUTPERFORMED THE MAJOR STOCK MARKETS OVERSEAS IN TERMS OF PRICE GAIN SO FAR IN THE YEAR.

HAVING UNDERGONE SOME CONSOLIDATION IN JUNE, THE HANG SENG INDEX RESUMED AN UPWARD MOMENTUM IN JULY FOLLOWING FLOTATION OF THE SHARES OF THE FIRST OF THE NINE CHINA STATE-OWNED ENTERPRISES.

THE INDEX RALLIED TO A HIGH OF 7,605 ON AUGUST 19 ON ANNOUNCEMENT OF FAVOURABLE CORPORATE RESULTS.

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