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PAGE THREE XPGRØ994 RESTR
IN GAMMON, ITS WHOLLY OWNED CONSTRUCTION SUBSIDIARY.SALE WILL GIVE
JARDINES BADLY NEEDED CASH INJECTION.
5.ALSO ON GLOOMY SIDE, BANKRUPTCIES OVER FIRST NINE MONTHS ARE UP A
REPORTED 61 PER CENT AND VALUE OF CLAIMS AGAINST LIQUIDATORS A
REPORTED 100 PER CENT.CONSTRUCTION ACTIVITY IS DOWN A REPORTED
30 PER CENT FROM LAST YEAR WITH SLIDE PREDICTED TO CONTINUE. THERE IS
LITTLE PROSPECT OF ANY GROWTH IN OVERALL EXPENDITURE IN PLANT
MACHINERY AND EQUIPMENT AS LOCAL BUSINESSMEN ARE RELUCTANT TO
REINVEST THEIR EXFORT EARNINGS IN HKONG.(FINANCIAL SECRETARY HAS
SAID HE IS LOOKING AT TAX MEASURES TO ENCOURAGE REPATRIATION AND
REINVESTMENT OF THESE PROFITS).STOCK MARKET TURNOVER IS THIN,
PROPERTY MARKET REMAINS IN A SLUMP AND CONSUMER SPENDING IS FLAT.
6.NEW FOREIGN EXCHANGE SYSTEM IS ALSO CONTRIBUTING TO UNCERTAINTY.
FORMERLY EXCHANGE RATE WAS FIXED WHILE INTEREST RATES AND MONEY
SUPPLY VARIED.NOW THERE IS IN EFFECT A FIXED EXCHANGE RATE WITH A
FLOATING INTEREST RATE.DANGER UNDER OLD SYSTEM WAS THAT OF
SIGNIFICANT INFLATION IF DOLLAR WAS ALLOWED TO CONTINUE ITS STEEP
DECLINE.PRICES HAD ALREADY BEEN RISING AND AS CONSEQUENCE REAL
WAGES IN CONSTRUCTION AND MANUFACTURING INDUSTRIES ARE DOWN.
INFLATION IS NOW EXPECTED TO EQUAL LAST YEARS RATE OF 11 PER CENT.
UNDER NEW FINANCIAL SYSTEM RISING INTEREST RATES WOULD BRING ON A
CREDIT SQUEEZE HAVE A SERIOUS IMPACT ON DOMESTICALLY ORIENTED
BUSINESSES GENERALLY.IN COURSE OF FIRST WEEK, LIQUIDITY DRAINED OUT
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