HONG KONG: STOCK MARKET CLOSES AT RECORD HIGH AFTER HANDOVER

(3 Jul 1997) English/Nat

Confident Hong Kong investors returned to work on Thursday after the five day holiday marking the handover.

The stock market -- which closed at a record high last week on its last day of activity under British rule -- opened up then dipped slightly in early morning trading.

Analysts nonetheless declared themselves optimistic, saying they believe Beijing is strongly committed to a "business as usual" policy in Hong Kong.

The Stock Exchange's opening bell jolted Hong Kong businessmen out of their long- weekend hangovers and signalled the start of the first trading day under Chinese rule.

The market jumped up one per cent then fluctuated over fears that the new Hong Kong government is to increase housing supply. Property in overcrowded Hong Kong is at a premium.

But analysts said they expected the index to climb again, saying they had faith in Beijing's commitment to leave well alone in Hong Kong.

SOUNDBITE:
"There might be a little bit of an anticlimax in the market because we were so good last week, but there's nothing been said over the weekend which would shake anybody's confidence. To the contrary, President Jiang Zemin's speech to the world was very specific about Hong Kong's freedoms, rights and autonomy and it really couldn't have been more encouraging."
SUPER CAPTION: Howard Gorges, Director, South China Brokerage

One could have been forgiven for not realising there had been any change -- the traffic, the weather and the people scurrying to work -- everything was back to normal.

And young businessmen who've traditionally seen Hong Kong as a
place to make their fortune were as confident as ever.

SOUNDBITE:
"There's always money to be made and there's always money to be lost, so it depends how you play it."
SUPER CAPTION: Ringo Wong, stockbroker

Chinese or expatriate -- businessmen said the handover would not affect them adversely. If anything, many believe there is even more money to be made now.

SOUNDBITE:
"It's going to be business as usual. From a work point of view, from a business point of view, things are probably going to get better. The closer the ties with China the better: they've got 1.3 billion people, we've got 6.6 million -- our GDP per capita is $24,000, theirs is less than $1,000 and with that kind of potential for them to grow up and Hong Kong to help them, both sides should do really well out of it."
SUPERCAPTION: Douglas Hansen-Luke, sales executive, W.I. Carr Securities

So far it looks like capitalist Hong Kong will continue to thrive -- even under Communist China's rule.

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