XN000022-1994-07-06 — Page 11

WEDNESDAY, JULY 6, 1994

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REGULATION IN FINANCIAL MARKETS USEFUL

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STABILITY IN HONG KONG'S FINANCIAL MARKETS COULD NOT HAVE BEEN FOSTERED THROUGH A TOTAL LACK OF REGULATION, THE FINANCIAL SECRETARY, THE HON SIR HAMISH MACLEOD, SAID TODAY (WEDNESDAY).

SIR HAMISH SAID: "THE SAME HOLDS TRUE FOR THE PROPERTY MARKET. COURSE, THE MORE SATISFACTORILY A MARKET IS WORKING, THE LESS INCLINED WE ARE TO INTERVENE.

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IN A WRITTEN REPLY TO A QUESTION BY DR THE HON DAVID LI IN THE LEGISLATIVE COUNCIL, SJR HAMISH SAID "POSITIVE NON-INTERVENTION" NEVER MEANT "A FREE-FOR ALL" OR "DO NOTHING".

HE SAID SOME OF THE MEASURES PUT FORWARD BY THE SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS FOR STABILISING THE PROPERTY MARKET WERE SIMPLY AN ADJUSTMENT OF A FORM OF REGULATION WHICH HAD BEEN IN PLACE FOR YEARS.

"THE CONSENT SCHEME, FOR EXAMPLE, WHICH ALLOWS FLATS TO BE PUT ON THE MARKET BEFORE THEY HAVE BEEN COMPLETED, HAS ALWAYS BEEN ADMINISTERED SO AS TO TRY TO BALANCE THE INTERESTS OF HOME-BUYERS AND PROPERTY DEVELOPERS.

"THE CHANGES TO IT AIM TO SHORTEN THE TIME BETWEEN PUTTING FLATS ON HE MARKET AND ACTUAL OCCUPATION, AND SO TO REDUCE THE TIME AVAILABLE FOR SPECULATIVE SALES AND RE-SALES TO PUSH THE COST OF FLATS, HE SAID.

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SIR HAMISH NOTED THAT THE MOST IMPORTANT ELEMENT STRATEGY TO STABILISE FLAT PRICES WAS TO FACILITATE A SIMPLE IN SUPPLY.

"THAT IS A PIECE OF INTERVENTION IN THE MARKET WITH THINK OUR BUSINESS COMMUNITY WOULD BE QUITE AT EASE."

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THE FINANCIAL SECRETARY ADDED THAT WHAT THE GOVERNMENT HAD NOT DONE WAS TO SEEK TO INTRODUCE ANY MEASURES TO REGULATE FLAT PRICES DIRECTLY AS THERE WAS TO BE NO PRICE CONTROL.

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"THUS IF POSITIVE NON-INTERVENTIONISM' MEANS A POLICY OF NOT INTERFERING UNNECESSARILY IN THE FREE OPERATION OF THE MARKET, AND NOT PUTTING RED TAPE IN THE WAY OF COMMERCIAL ENTERPRISE, THIS IS STILL A PRIME POLICY.

"BUT STABILITY IN THE FINANCIAL AND PROPERTY MARKETS CANNOT BE ACHIEVED UNLESS INVESTORS SEE THAT COMMERCIAL ACTIVITIES IN HONG KONG ARE REASONABLY AND PRUDENTLY MANAGED AND REGULATED, SIR HAMISH SAID.

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