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AGENCE FRANCE PRESSE
Hong Kong, Oct 30: Hong Kong government will use its huge monetary reserves to intervene in the markets to counter any renewed speculation that may undermine them, financial secretary Donald Tsang said on Friday. Any such action will be "orderly, slow and gradual" and carried out in such a way that it does not upset the market, Tsang told a conference here, attended by business leaders.
The government spent 118 billion Hong Kong dollars ($ 15.2 billion) on a controversial share-buying spree in August to fight off speculators who mounted a double-pronged attack on the stock and currency markets.
An independent entity called the Exchange Fund Investment Ltd has been established to manage the government's stock holdings.
Tsang said the government's portfolio will be professionally managed by the company without claiming any special privileges.
The company would be operating "in total transparency", he said, adding that the government would not put any representatives in companies in which it holdsstocks.
The government holds more than 10 per cent of the stocks in three companies - Swire Pacific, New World Infrastructure and Cheung Kong Holdings Ltd after the share-buying spree.At that time, the intervention was widely criticised by foreign investors and local legislators for damaging Hong Kong's reputation as a free market bastion.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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