TNAG-1157-FCO40-1437-Visits-by-FCO-Ministers-to-Hong-Kong-1982 — Page 136

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Hong Kong Stock Market and Exchange Rate Fluctuations

Sharp fluctuations in the Hang Seng Index are more common than

in Western stock exchanges. In 1973 the Index fell from 1700 to

little more than 200. In August of this year (before the Prime

Minister's visit) it fell from over 1300 to 937. A number

of other factors, such as the world recession, reduced growth

forecasts, declining property prices and high international

interest rates are affecting the market. Similarly, the Hong

Kong dollar has been affected by the strength of the US dollar:

the Hong Kong dollar's rate against the pound is very similar to

that at the beginning of 1982.

Why is Lord Belstead not going to Peking?

I am here to see Hong Kong and will then be going to Brunei and

to Bangkok for the Heads of Mission Meeting. While I am here it

is extremely valuable to have a round-up of Hong Kong views on

the vital question of the future. [IF PRESSED] The Prime

Minister only recently explained our position to the Chinese.

do not think it would be right for me to go to China now. I

have full confidence in our Ambassador.

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