XN000022-1994-09-26 — Page 7

MONDAY, SEPTEMBER 26, 1994.

"WE

AS

CONSTRUCTIVELY

CHIEF EXECUTIVE

INTEND TO CO-OPERATE AS POSITIVELY AND

THE AND POSSIBLE WITH

PREPARATORY COMMITTEE THE (DESIGNATE) OF THE SPECIAL ADMINISTRATIVE REGION (SAR.

I

"THAT'S WHAT PEOPLE IN HONG KONG WOULD WANT TO DO. WE OBVIOUSLY WANT TO DISCUSS PRACTICAL WAYS IN WHICH THAT CAN BE TAKEN FORWARD. AM SURE THAT WILL BE A SUBJECT ON THE AGENDA WHEN MR HURD AND MR QICHEN MEET LATER THIS WEEK.

1

QIAN

MR PATTEN

SAID

GOVERNMENT CHINA.

THAT

IT WAS IN THE INTEREST THERE WAS BETTER CO-OPERATION

OF THE FUTURE SAR BETWEEN BRITAIN AND

L

IN

"I THINK THAT IT'S AN IMPORTANT PART OF OUR RESPONSIBILITY THE NEXT THOUSAND DAYS TO ENSURE THAT THE SAR GOVERNMENT CAN GET OFF FINANCES, WITH A GOOD TO AS GOOD A START AS POSSIBLE WITH SOUND

ECONOMIC INFRASTRUCTURE, SUCCESS," HE ADDED.

WITH

ALL THE INGREDIENTS

FOR

CONTINUING

INAUGURAL ISSUE OF FIVE-YEAR EXCHANGE FUND NOTES WELL RECEIVED

GOOD ISSUE OF

THE HONG KONG MONETARY AUTHORITY (HKMA) SAID THERE WAS A MARKET RESPONSE TO THE TENDER TODAY (MONDAY) FOR THE FIRST FIVE-YEAR EXCHANGE FUND NOTES WHICH MATURES IN 1999.

THE FIVE-YEAR NOTES, WHICH CARRIED A COUPON RATE OF CENT, WERE 2.12 TIMES OVERSUBSCRIBED.

THE

AVERAGE

7.45 PER

PROVIDING

AN

ACCEPTED TENDER PRICE WAS 99.64, ANNUALISED YIELD OF 7.68 PER CENT, OR ABOUT 37 BASIS POINTS ABOVE THAT FOR FIVE-YEAR U.S. TREASURY NOTES.

LARGELY

SUCH A NARROW SPREAD DEMONSTRATES THAT THE MARKET HAS DISCOUNTED THE RISK, IF ANY, ASSOCIATED WITH THE CHANGE OF SOVEREIGNTY AND THUS NOT DEMANDED ANY SIGNIFICANT PREMIUM.

"THE RESULT OF THIS LANDMARK TENDER IS VERY ENCOURAGING, ACTING CHIEF EXECUTIVE OF HKMA, MR DAVID CARSE, SAID.

1

THE

AN

E

"THE SUCCESSFUL LAUNCH OF THE FIVE-YEAR NOTES HAS IMPORTANT AND RELIABLE BENCHMARK FOR HONG KONG DOLLAR DEBT IN FIVE-YEAR AREA.

ESTABLISHED

THE

ABOUT 90 BONDS

AT 7.68 PER CENT, THE YIELD FOR FIVE-YEAR NOTES IS

KONG DOLLAR BASIS

BELOW POINTS

THAT FOR CORRESPONDING HONG ISSUED BY INSTITUTIONS OF TRIPLE A CREDIT RATING.

THIS SPREAD REFLECTS STRONG INVESTOR CONFIDENCE IN, AND SUPPORT FOR, THE EXCHANGE FUND NOTES THAT IS LARGELY ATTRIBUTABLE TO THE DEBT INSTRUMENT'S HIGH LEVEL OF LIQUIDITY IN THE SECONDARY MARKET.

THE INTRODUCTION OF THE FIVE-YEAR NOTES MARKS ANOTHER MILESTONE IN THE DEVELOPMENT OF THE EXCHANGE FUND NOTE PROGRAMME .

THE PROGRAMME WAS INTRODUCED IN MAY 1993, WITH THE TWO-YEAR NOTES TO REPLACE THE TWO-YEAR GOVERNMENT BONDS. FOLLOWED BY THE ISSUE OF THREE-YEAR NOTES IN OCTOBER 1993.

LAUNCH OF

THIS WAS

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