TNAG-0623-FCO40-771-Hong-Kong-Government-investments-in-South-African-stocks-1977 — Page 48

CONFIDENTIAL

The powerful anti-South African

the Anti-Apartheid Movement,

and was continuing to do so. lobby in this country, led by 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 Governor 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 Kong Government to consider a gradual phased reduction of their holdings, provided that this did not cause any significant financial disadvantage. I submit a draft letter for

Lord Goronwy-Roberts to approve for Mr Murray's signature. CSAD, FRD who have consulted the Treasury, and the Senior

Economic Adviser concur.

16 February 1977

1.4. B. Sand.

A B Stewart

Hong Kong Department

CC:

PS/Mr Rowlands

Mr Cortazzi

Mr Reid (CSAD)

Mr Maud (FRD)

Mr Smith (Senior Economic Adviser)

Mr Lipsey

amount involved

agree with this suggestion. The only £2.8 million, which must be an

CONFIDENTI AL

(Are they