Search

 

Cablegate: Hang Seng Plummets 12.7 Percent, Largest Drop Since 1989

VZCZCXRO5436
RR RUEHCHI RUEHCN RUEHDT RUEHGH RUEHHM RUEHNH RUEHVC
DE RUEHHK #1983 3011005
ZNR UUUUU ZZH
R 271005Z OCT 08
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC 6113
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS HONG KONG 001983

SIPDIS

STATE FOR EAP/CM AND EEB/OMA, TREASURY FOR OASIA

E.O. 12958: N/A
TAGS: ECON EFIN EINV ETRD HK CH
SUBJECT: Hang Seng Plummets 12.7 percent, Largest Drop Since 1989

1. The Hang Seng Index plummeted as much as 15 percent to a low of
10,685 before recovering slightly to finish the day down 1602.54
points, or 12.7 percent, at 11,015.84. This marked the largest
single-day drop since the Tiananmen Incident in 1989. No one was
spared, but Chinese corporate stocks in every sector took the worst
beating. ICBC fell 11 percent, Aluminum Corp of China (Chalco)
dropped 20 percent and Citic Pacific plunged 24 percent as investors
sought help from Hong Kong Legislative Council members to claim
compensation for that company's US$2 billion loss on currency
derivatives. HSBC shares were also down sharply. Analysts said
that wide-spread pessimism about an economic recovery, combined with
the slide in Japan's Nikkei, dropping NYSE futures markets, and
worse than predicted profit announcements by ICBC and Chalco, drove
the market down.

2. Interbank liquidity tightened for overnight and borrowing
exceeding one month. HIBOR on Monday, October 27, rose to 1 percent
for overnight, 2 percent for one week, 2.75 percent for two weeks,
3.8 percent for one month, 4.05 percent for two months, 4.15 percent
for three and six month borrowing and 4.1 percent for 12 month
loans. That compares to 0.8 percent for overnight loans and 3.6
percent for one, two, three and six month borrowing on Friday.

3. A better than expected Hong Kong trade report could not reverse
the slide in equities. September exports increased 3.6 percent, up
from a 1.9 percent increase in August. But third quarter exports
fell by 5.7 percent compared to last year. Exports of machinery and
electronics to China and the region were down, suggesting further
slowing of trade in the months ahead. Imports for the month were up
3.9 percent, up from August's 1.5 percent growth.

© Scoop Media

 
 
 
World Headlines

 

University of Auckland: Low-Lying Pacific Island Has More Land Above Sea Level Than In 1943

An inhabited island in the low-lying Pacific nation of the Marshall Islands, which are thought to be at risk of being inundated by rising sea levels, has actually increased in size since 1943, scientists say. And the increase in area above sea level is likely ... More>>

APEC : Leaders Issue Kuala Lumpur Declaration

The leaders of the 21 APEC member economies issued the Kuala Lumpur Declaration following the first-ever virtual 27th APEC Economic Leaders’ Meeting chaired by Malaysian Prime Minister Muhyiddin Yassin. Convening for the first time since the ... More>>

UN: Appeals For $35 Billion To Help World’s ‘Most Vulnerable And Fragile’ In 2021

UNOCHA/HFO A family flees the violence in Idlib, Syria. (file) A record 235 million people will need humanitarian assistance and protection next year, a near- 40 per cent increase on 2020 which is “almost entirely from COVID-19”, the UN’s emergency ... More>>

OHCHR: UN Committee Issues Recommendations To Combat Racial Profiling

The Committee on the Elimination of Racial Discrimination today published its guidance to combat racial profiling, emphasizing, among other issues, the serious risk of algorithmic bias when artificial intelligence (AI) is used in law enforcement. The ... More>>