CONFIDENTIAL
10. THE HONG KONG STOCK MARKETS TOO HAVE PERFORMED WELL. THE
HANG SENG INDEX ROSE 26 PER CENT IN JANUARY, CLOSING LESS THAN A POINT BELOW THE 1983 PEAK. OPTIMISM WAS WIDELY SPREAD, AND
WAS HELPED BY THREE SEPARATE CUTS IN INTEREST RATES. OVERSEAS INTEREST INCREASED, AND CHINA'S ACTIVE THOUGH MODEST PARTICI- PATION IN THE PROPERTY MARKET AND THE INDUSTRIAL SECTOR WAS WIDELY
INTERPRETED, RIGHTLY OR WRONGLY, AS SIGNALLING A COMMITMENT TO MAINTAIN THE PRESENT POLITICAL AND ECONOMIC STRUCTURE.
11. THE PROPERTY MARKET REMAINS GENERALLY DULL, THOUGH THERE
HAS BEEN SOME INCREASE IN DEMAND FOR COMMERCIAL AND INDUSTRIAL PROPERTY. A PRIME DEVELOPMENT SITE (ADMIRALTY 2) WAS SOLD AT
AUCTION ON 15 FEBRUARY FOR HK DOLLARS 380 MILLION. WHILST THIS
WAS SUBSTANTIALLY LESS THAN IT WOULD HAVE FETCHED TWO YEARS AGO, IT NONETHELESS GAVE THE LIE TO THOSE PESSIMISTS WHO THOUGHT THAT THE BOTTOM HAD FALLEN OUT OF THE PROPERTY MARKET • ALTOGETHER PARTICULARLY AS THE PURCHASERS WILL NEED TO SPEND CONSIDERABLY MORE THAN DOLLARS ONE BILLION ON THE SUPERSTRUCTURE. AT THE SAME TIME THE SALE PRICE AND THE NUMBER OF BIDDERS WAS CONSIDERABLY BELOW SOME OF THE ESTIMATES CANVASSED IN THE PRESS
UP TO THE DAY OF THE AUCTION.
HADDON-CAVE
FUTURE OF HONG KONG
LIMITED
ED/FRD
ED/FED
ED/PLANNING STAFF
ED/PUSD
D/HD/PUSD (MR FLOWER)
PES.B. (MR WALKER)
LEGAL ADVISER (SIR IAN SINCLAIR
PS
PS/LADY YOUNG
PS/MR LUCE
COPIES TO:
BUCKINGHAM PALACE
PS/LORD PRESIDENT OF THE COUNCIL
PS/HOME SECRETARY
PS/CHANCELLOR OF THE EXCHEQUER
PS/LORD PRIVY SEAL
PS/SECRETARY FOR TRADE & INDUSTRY
COPIES TO: (VIA ADR)
MR ROBERTS
NEWS D
PS/PUS
SIR J BULLARD
SIR W HARDING
MR DONALD
MR WRIGHT
SIR C TICKELL
HR BURROWS LEGAL ADVS
MR COLES NO 10 DOWNING ST
MR MARTIN ASSESSMENT STAFF CABINET OFFICE
MR GOODALL
CABINET OFFICE
MR BRENNAN CABINET OFFICE PS/S OF S FOR DEFENCE D PS/ATTORNEY GENERAL
SIR P CRADOCK RM K195
BIR .P CRADOCK NO 10 DOWNING STREET
CONFIDENTIAL
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