TNAG-2027-FCO40-2889-Hong-Kong-freezing-of-Kuwaiti-and-Iraqi-assets-1990 — Page 51

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PERBONAL FOR MARSKÉN FROM ACTING GOVERNOR

TARSE

0:498 3 FREEZING OF KUWAITI AND FR800 898=-8 JOSSIBLE DI69056_E IN HONG KONG BEFORE IMPLEMENTATION

HE PRESIS

EXTRES

& PER CEN

THE FALL IN SHARE PRICES IN HONG KONG ON & AUGUST OF 7.4 DER DENT WAS NOT

THAT OUT OF LINE WITH THAT IN SEVERAL OTHER 7.3 PER CENT. SINGAPORE 6.35 3ER CENT. FRANKFURT MUST ALSO BE SEEN IN THE CONTEXT OF OUR MARKET MOST LIQUID (WITH A ONE-DAY S EXENT PERIOD) AND OF PRICES HERE HAVING RISEN RAPIDLY OVER RECENT MONTHS. OUR YARKET HAD BEEN ONE OF THE BEST PERFORMING IN THE WORLD OVER THE FIRST SEVEN MONTHS OF THE YEAR AND COMMENTATORS HAD BEEN EXPECTING SOME CORRECTION SOONER OR LATER.

BEING ONE OF

HE NATURE OF

2. THIS AID, HOWEVER. WE CERTAINLY HAVE ANECDOTAL EVIDENCE TO SUGGEST

ERE WAS KUWAITI SELLING TAKING PLADE THOUGH, 85 THINGS DURING PERIODS OF CRISIS. THE EXTENT OF THIS HAVE BEEN EXAGGERATED. WE ARE AWARE OF SOME BANNS WHICH STALLED UNTIL TUESDAY. SEEKING CONFIRMATION THAT THE INSTRUCTIONS, EMANATING FROM LONDON. WERE IN ORDER UNDER THE UK REEZE ORDER AND IT MAY BE NOTED THAT MARKET TURNOVER ON MONDAY WBB LOWER THAN THAT ON EITHER TUESDAY OR WEDNESDAY WHEN OUR

FREEZE ORDER WAS IN PLACE. VIRTUALLY ALL THE SELLING ORDERS OF WHICH WE ARE AWARE EMANATED FROM THE KUWAIT INVESTMENT OFFICE (AIO) IN LONDON AND WE DREW THE ATTENTION OF THE BANK OF ENGLAND:

WE BELIEVE THAT THERE MAY BE A PROBLEY OVER THE FACT THE JA ORDER ONLY COVERS PERSONS RESIDENT IN KUWAIT THAT AT MAY NOT APJLY TO THE KIO,

3.

THERE HAS BEEN VERY LITTLE LOCAL CRITICISM OVER THE DELAY IN BRINGING IN THE FREEZE. THE LINE WE HAVE TAKEN IS THAT WE WERE URGENTLY CONSULTING WITH THE UK GOVERNMENT AND THAT IT WAS IXPORTANT TO CONSIDER ISSUES CAREFULLY BEFORE DECIDING PRECISELY WHAT ACTION TO TAKE. GIVEN HONG KONG'S ADHERENCE TO A FREE MARKET PHILOSOPHY AND THE ENSHRINEMENT OF THAT PHILOSOP-Y IN BOTH THE JOINT DECLARATION AND BASIC LAW.

FORD

سٹر کیا کیا کیا

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