TNAG-0623-FCO40-771-Hong-Kong-Government-investments-in-South-African-stocks-1977 — Page 45

-TV, anak állta mtz -

CONFIDENTIAL

and was continuing to do so.

The powerful anti-South African lobby in this country, led by the Anti-Apartheid Movement, would certainly make an issue out of it.

RECOMMENDATION

5. In the circumstances I recommend that we should draw the Hong Kong Government's attention to the sensitivity, as we see it, of their investments in South African stocks (we do not know whether the Govenor himself is aware of the position); say that we should not wish to suggest that the matter is so sensitive that the Hong Kong Government should divest themselves of their investments in South African stocks at once; advise that they ought not to expand their portfolios and should in no circum- stances buy South African Defence Bonds; and invite the Hong KongGovernment to consider a gradual phased reduction of their holdings, provided that this did not cause any significant financial disadvantage.

FURTHER ACTION

6. In view of the political sensitivity of this matter, Lord Goronwy-Roberts may consider, if he agrees with the recommendation, that he should speak to the Governor himself about it when he passes through Hong Kong on 19 February. will therefore put a copy of this submission with Lord Goronwy- Roberts brief. CSAD, FRD who have consulted the Treasury, and the Senior Economic Adviser concur.

I

15 February 1977

JAB Stewart

copies:

PS/Mr Rowlands

Mr Cortazzi

Mr Reid CSAD

Mr Maud FRD

Mr Smith SENIOR ECONOMIC ADVISER

Mr TinseT

COMIT DEM TAT

Page 45Page 46