TNAG-0456-FCO40-521-Reports-and-accounts-of-Exchange-Fund-of-Hong-Kong-1974 — Page 24

ficates:

(iv) Interest on Hong Kong dollar debt certi- £862,884.67. This is the interest paid on the second series of debt certificatos mentioned in paragraph 6.

(v) Net loss on investment transactions and on year end revaluation of investments: €35,208,107.79. The rise in interest rates vhich began in July remained at a high level throughout the rest of 1973. Against this back- ground and a decline in sterling on foreign exchange markets the gilt-edged market weakened severely. As a result the gross redemption yield on short dated British Government stocks increased from 9.38% in December 1972 to 12.47% in

December 1973 and on 'longs' from 9.75% to 12.37%. This was reflected by a fall in the Financial Times Governme

ya securities index from 71.11 at the end of 1972 to 61.05 at

the end of 1973.

(vi) Exchange differences: £26,867,924.01 (net). Certificates of Indebtedness issued during the year vera brought to account at the rate of exchange at which certi- ficates were valued for balance sheet purposes as at 31st December 1972, that is to say, £1: HK$13.365. All certi-

ficates verc revalued at the end of 1973 at £1 : HK$11.8275. Against the exchange loss which resulted from this reviluı- tion there was a net appreciation in the exchange value of assets of £5,769,757.99. The exchange rates used in these calculations are the end of your closing middle rates in London provided by the Bank of England. They were as follows:

न

HK$11.8275

'to £1

US$2.3235

to £1

Belgium Francs 35.35

to £1

Sviss Francs 7.5460

to £1

D. Marks 6.2730

to £1