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FM BTC HONG KONG
TO DESKBY 11120OZ FCO
TELNO 113
OF 11100OZ APRIL 90
INFO IMMEDIATE DTI (FOR OT2)
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12 STAY
Mkc 121/2
RECEIVED IN REGISTRY
11 APR 1990
DESK OFFICE!
42
177340
MDHIAN 8242
TOP COPY Q DIBT ?
YOUR TELNO 53: VALUE OF BRITISH INVESTMENT IN HONG KONG
1. THE ORIGINAL PDS STG 19 BILLION FIGURE FOR THE GROSS STOCK MARKET VALUE OF BRITISH OWNED, CONTROLLED OR MANAGED COMPANIES IN HONG KONG WAS TAKEN DIRECT FROM A PAPER GIVEN US BY HENRY KESWICK IN FEBRUARY LAST YEAR. HE HAD CONSTRUCTED IT FROM FIGURES AVAILABLE TO HIM FOR HK TELECOM, HK BANK, HANG SENG BANK, SWIRE PACIFIC, CATHAY, HAECO, JARDINE MATHESON AND FOUR OF ITS CONSTITUENT PARTS PLUS CHINA LIGHT AND POWER AND HK AND SHANGHAI HOTELS. HIS FIGURES WERE APPARENTLY BASED ON THE STOCK MARKET VALUE AT THAT TIME. THESE NATURALLY HAVE CHANGED SINCE THEN. MOREOVER THE LIST IS NOT AND PROBABLY CANNOT BE A COMPLETE ONE OF ALL THE COMPANIES THAT MIGHT BE INCLUDED (NOR OF COURSE IS THERE ANY UNIVERSALLY ACCEPTABLE DEFINITION OF A BRITISH COMPANY IN THIS CONTEXT, LET ALONE OF A BRITISH MANAGED ONE). THE FIGURE WAS RAISED TO A POSSIBLE PDS STG 20 BILLION RECENTLY BY SWIRES ON THE BASIS OF MORE DETAILED INFORMATION AVAILABLE TO THEM ABOUT THEIR OWN CORPORATE ACTIVITIES. KESWICK HAS RECENTLY ESTIMATED IN A PAPER PREPARED FOR MR HESELTIME ON 3 APRIL THAT THE PRESENT MARKET CAPITALISATION IS SLIGHTLY ABOVE PDS STG 21 BILLION. WE ARE NOT IN A POSITION TO CHECK THESE FIGURES, BUT BELIEVE THAT THEY CAN BE USED WITH SOME CONFIDENCE, PERHAPS WITH THE QUALIFICATION THAT THEY ARE ESTIMATES FROM PRIVATE BUT VERY WELL PLACED SOURCES.
2. I APPRECIATE THAT WE HAVE NOT YET ADEQUATELY RESPONDED TO YOUR VARIOUS OTHER REQUESTS FOR CLARIFICATION ON THIS SUBJECT E.G. YOUR TELNOS 47 AND 38. THIS FOR A VARIETY OF REASONS, NOT LEAST SHORTAGE OF STAFF AND PREOCCUPATION WITH MR MAUDE'S VISIT, MPS'S VISITS. THESE FIGURES ARE VERY HARD TO ARRIVE AT AND INVOLVE A HUGE AMOUNT OF WORK (MONTHS OF RESEARCH WENT INTO THE PAPERS ON THIS PREPARED BY MY PREDECESSOR, WHERE MANY OF THE FIGURES WE NOW USE ORIGINATED). MY BASIC BELIEF IS THAT THE LOWER AND SAFE FIGURES ON UK INVESTMENT IN HONG KONG, AND UK INVISIBLE EARNINGS FROM HONG KONG, DO NOT REPRESENT THE WHOLE STORY, EVEN ALTHOUGH IT IS ALL BUT IMPOSSIBLE TO VERIFY WITH ANY DEGREE OF TOTAL CERTAINTY THE HIGHER FIGURES. WHAT WE CAN DO IS USE FIGURES, WHICH HAVE BEEN MOSTLY
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