TNAG-1944-FCO40-2770-Stock-market-and-exchange-rate-in-Hong-Kong-1990 — Page 47

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FM HONG KONG

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OF 14093OZ JUNE 89

INFO IMMEDIATE WASHINGTON, PEKING

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STATE OF HONG KONG MARKET : 14 JUNE 1989

SUMMARY

1. THE HANG SENG INDEX CLOSED 25 POINTS UP ON REDUCED TURNOVER. THE MONEY MARKET REMAINED STABLE WITH THE HONG KONG DOLLAR EXCHANGE RATE FIRMING SLIGHTLY.

DETAILS

2. FOLLOWING YESTERDAY'S 85 POINT FALL, THE HANG SENG INDEX DROPPED 14 POINTS IN THE FIRST HALF HOUR OF TRADING. THE INDEX FELL INITIALLY TO AS LOW AS 2329 BEFORE REBOUNDING TO CLOSE AT 2365, WITH A NET RISE OF 10 POINTS FOR THE MORNING. IN THE AFTERNOON, THE INDEX CONTINUED TO RISE TO CLOSE AT 2380 WITH A TURNOVER OF HKDOLLARS 1.15

BILLION.

3. PRICES EASED IN THE MORNING FOLLOWING THE NEWS OF POLITICAL CRACKDOWN IN BEIJING BUT BARGAIN HUNTING LATER ON IN THE DAY RECOUPED EARLY LOSSES. THE DIRECTION OF THE MARKET REMAINS UNCLEAR. AT THIS TIME, THE MARKET IS STILL TOTALLY PUSHED BY DEVELOPMENTS IN CHINA. SINCE THE LAST NORMAL TRADING DAY ON 18 MAY, THE INDEX HAS NOW FALLEN

BY SOME 27 PERCENT.

4. TRADING IN THE HANG SENG INDEX FUTURES MARKET REMAINED LIGHT. A TOTAL OF 1118 CONTRACTS WERE TRADED. THE JUNE CONTRACT CLOSED AT 2353 WITH A 27 POINT DISCOUNT TO THE SPOT MARKET. THE AUGUST CONTRACT CLOSED AT 2365 WITH A 15 - POINT DISCOUNT TO THE SPOT MARKET. ONLY 273 CONTRACTS WERE TRADED FOR THIS MONTH. THERE WAS NO TRADING IN OCTOBER AND THE DECEMBER CONTRACTS.

5. THE MONEY MARKET REMAINED STEADY TODAY WITH THE HONG KONG DOLLAR EXCHANGE RATE FIRMING SLIGHTLY TO 7.781 TO THE US DOLLAR. HONG KONG DOLLAR INTEREST RATES EASED FURTHER BUT THEY WERE STILL HIGHER THAN

THE US DOLLAR RATES BY MORE THAN 1 PERCENT.

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