RESTRICTED
FM HONG KONG
TO IMMEDIATE FCO
TELNO 1730
OF 291015Z MAY 89
RESTRICTED
HKC 100/10
INFO IMMEDIATE WASHINGTON, PEKING
TOP COP O DIST
33
5322
6731
STATE OF HONG KONG MARKET 29 MAY 1989
SUMMARY
HANG SENG INDEX CLOSED 80 POINTS HIGHER AFTER A DAY OF INTENSIVE BARGAIN HUNTING. THE MONEY MARKET WAS STABLE WITH THE HONG KONG DOLLAR LITTLE CHANGED.
DETAILS
2. FOLLOWING A DROP OF SOME 380 POINTS LAST WEEK, THE HANG SENG INDEX ROSE 47 POINTS IN THE FIRST HALF HOUR OF TRADING TODAY. THE INDEX MOVED WITHIN A NARROW RANGE IN THE MORNING AND CLOSED AT 2829, WITH A TOTAL GAIN OF 64 POINTS. IN THE AFTERNOON, THE INDEX CONTINUED TO RISE AND GAINED ANOTHER 16 POINTS TO CLOSE AT 2845. THE TOTAL GAIN FOR THE DAY WAS 80 POINTS WITH A TURNOVER OF HK DOLLARS 2.04 BILLION.
3. BARGAIN HUNTING RULED THE DAY AS INVESTORS TOOK ADVANTAGE OF THE LULL IN POLITICAL DEVELOPMENTS IN BEIJING TO BUY BLUE CHIPS IN THE MARKET. THE MARKET WAS STILL VERY CAUTIOUS AND A FURTHER SLOW RECOVERY IS EXPECTED IT THE CONTINUING DEMONSTRATION IN BEIJING DOES NOT ERUPT INTO VIOLENCE.
4. THE HANG SENG INDEX FUTURES MARKET WAS LESS ACTIVE WITH A TOTAL OF 1879 CONTRACTS TRADED FOR THE DAY. THE JUNE CONTRACT, STILL TRADING AT A 45 POINT DISCOUNT TO THE SPOT MARKET, CLOSED AT 2801, WHILE THE AUGUST CONTRACT TRADED AT A SLIGHT, 4 POINT, PREMIUM TO THE SPOT MARKET AT 2850. NO OCTOBER CONTRACT WAS TRADED TODAY.
5. THE MONEY MARKET REMAINED STEADY WITH THE HONG KONG DOLLAR CLOSING LITTLE CHANGED, AS WERE INTEREST RATES.
WILSON
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