TNAG-1255-FCO40-1588-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 27

CONFIDENTIAL

Hong Kong Stock Market and Exchange Rate Fluctuations

12.

Sharp fluctuations in Hang Seng Index more common than in western Stock Exchanges. Of course uncertainty

over Hong Kong's future periodically affects market but

there are other factors eg world recession, worldwide

strength of US dollar, high international interest rates. State of Hong Kong's economy basically very sound. Cause for concern is political not economic.

Foreign and Commonwealth Office

10 October 1983

CONFIDENTIAL