GPS 275
CONFIDENTIAL
CONFIDENTIAL
FM HONG KONG 120345Z AUG 83
TO PRIORITY FCO
TELEGRAM NUMBER 1193 OF 12 AUGUST 1933
EXCHANGE FUND ORDINANCE
НИЙ 105
*0.
12 AUG 1983
TOP deRy
Ра
APPROVED INVESTMENTS.
IN MY TELNO 556 OF 4TH JUNE 1981, YOUR APPROVAL WAS SOUGHT IN ACCORDANCE WITH SECTION 3(2) OF THE EXCHANGE FUND ORDINANCE TO PURCHASE AN EQUITY INTEREST IN CABLE AND WIRELESS (HONG KONG) LTD. APPROVAL WAS GIVEN IN YOUR TELNO 572 OF 5TH JUNE 1981.
2. IN PARAGRAPH 3 OF MY TELNO 556, THE POSSIBILITY OF INVESTING UP TO 10 PER CENT OF THE FUND IN EQUITIES WAS MENTIONED, BUT APPROVAL TO INVEST UP TO THIS LIMIT WAS NOT SOUGHT AT THAT TIME.
3. THE DEVELOPMENT LOAN FUND HOLDS EQUITY INVESTMENTS IN THE
FOLLOWING COMPANIES:
(A) THE CROSS HARBOUR TUNNEL CO. LTD.
(3) HONG KONG AIR CARGO TERMINALS LTD.
(C) HONG KONG BUILDING AND LOAN AGENCY LTD.
COMPANIES (A) AND (C) ARE PUBLIC COMPANIES LISTED ON THE STOCK
EXCHANGES, BUT (B) IS NOT. THE TOTAL VALUE OF THE SHARES HELD IN
THESE SUCCESSFUL COMPANIES IS DIFFICULT TO ESTIMATE BECAUSE
(5) IS NOT QUOTED, BUT IN SUM IT IS UNLIKELY TO BE MORE THAN
ABOUT DOLLARS 600 MILLION. CONSIDERATION IS BEING GIVEN TO THE
TRANSFER OF THESE SHARES AT A FAIR PRICE TO THE EXCHANGE FUND
< AGAINST CASH FOR THEY WOULD BE A SOUND INVESTMENT FOR THE E F.
THE OBJECT OF THE EXERCISE WOULD BE TO REDUCE THE DEVELOPMENT
LOAN FUND DRAWINGS FROM THE GENERAL ACCOUNT, AND SO IN TURN
REDUCE THE BUDGET DEFICIT.
4. YOUR APPROVAL UNDER SECTION 3(2) OF THE EXCHANGE FUND
ORDINANCE FOR THESE INVESTMENTS IS SOUGHT. IF THE APPROVAL NOW
SOUGHT IS GIVEN, THE INVESTMENT OF THE EXCHANGE FUND IN EQUITIES
WILL BE SUBSTANTIALLY LESS THAN THE 10 PER CENT LIMIT MENTIONED
ABOVE, AND WHICH IS STILL REGARDED AS THE MAXIMUM THAT SHOULD BE
INVESTED IN EQUITIES.
Ill
HADDON-CAVE
MINIMAL
HKD ERD
THIS TELEGRAM WAS NOT
ADVANCED
FINANCED
CONFIDENTIAL
(34
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