TNAG-1764-FCO40-2518-Hong-Kong-stock-market-and-exchange-rate-1988 — Page 118

HKEAO NEW YORK

2.

P.7

6. The Wall Street Journal,

Journal, which has not only the largest circulation of any newspaper in North America but also the most influence in banking, business, investment and industrial circles, consistently exposed in the early days,

days, what it perceived to be the structural weaknesses of the Hong Kong markets and the handling of events there, in both its editorial and news pages. Samples of extracts from the Journal's pages include: "The notion Of protecting buyers and sellers from themselves doesn't sound like the free-market epirit that built

the island; perhaps it's preparing for

for life

life under

under Beijing"; "Hong Kong's action in closing the Exchange may lead to crisis"; "The Hong Kong fiasco suggests the costs borne when public officials

officials panic and

and withhold support

But it's still not clear that Hong Kong Can easily bounce back as a financial center

For Hong Kong it's been a losing deal, but the world economy may yet come out ahead if other financial centers learn from the experience".

MOTA halonrad

On

7. Later, the Journal struck A November 3, it published an op-ed piece by Ronald Li defending the closure. On the following day,

considerably more positive article, from Adi Ignatius, appeared with the headline "Hong Kong moves to restore its financial reputation. Colony appears likely to weather storm over the four-day market shutdown" The week before, on Oct 27, the Financial Times had a helpful editorial which stated that: "The decision to close

·

the markets, though the

the tărɣe i

target of widespread criticism, may

turn out to have been the most sensible COUTSE circumstances.

+

the

8. The Economist, which now has an extensive US readership of opinion formers

formers and decision makers, was trenchant. Its October 3 issue reported: "The closure of the Hong Kong stock and stock-index-futures markets for four days last week was for the worst of reasons

It was to help local moneymen and brokers who found themselves inconveniently stuffed with

with the Hang Seng index futures contract

many of them pals or business associates of officials at the Hong Kong Stock Exchange". (London will presumably cover the Economist in depth but it should De noted that 40፥ of the weekly's circulation is in North America).

9.

•

The New York Times also closely monitored Hong Kong events; its reports were generally balanced. But it was significant that in a long, analytical article (Oct 28) dealing with the internationalisation and emerging role of foreign markets, it singled out Hong Kong as follows: "Some market professionals believe Hong Kong's influence may wane if investors decide that they cannot afford to put their money in exchanges that will be shut down during crises." Nicholas Kristof, in an article published on November 2, painted both sides of the picture. He Started by saying that: "Stock werkeis fell everywhere inst month, but in Hong Kong

Kong the

the crash W25 the steepest, most palpable and perhaps most telling

But the cement that binds Hong Kong is confidence confidence about business prospects and confidence that China will leave it alone

-

/.... 3