Support for the Government's intervention in the stock market came from an unlikely quarter yesterday with the Regent Pacific Group saying the worst of the latest speculative attack appeared to have passed thanks to the move. Regent Pacific Group chairman Jim Mellon said it appeared that the Government would be able to hold the market at present levels, at least in the short term. He said speculators had tended to retreat whenever the six-month Hong Kong dollar forward rate premium hit 3,000 points. 'The bad news has arrived in Russia and once the bad news is out it tends to have a cathartic reaction,' he said. He said it was right for the Government to intervene. 'There was a very big number of short positions outstanding in the Hong Kong market and that was leading to a spiral of panic developing. Something needed to be done to restore confidence.' He said there was a danger, however, that distressed corporates would try to capitalise on the Government's intervention if it was sustained. In voicing support for the intervention, Mr Mellon appeared intent on distancing himself from overseas-based hedge funds, which he said 'could not care less where they make their money'. He said it was a mistake that the Government had publicly confirmed it was buying into the market. 'It's a bit like playing poker. Saying nothing gives you a better chance of winning,' he said. The Government risked becoming a target for hedge funds, which could monitor the activities of the brokers the Government was using and the stocks they were buying. 'They have created a trading range that hedge funds can deal against.' He said the Government should repeg the dollar at HK$10 to US$1 and then commit its foreign reserves to maintaining that exchange rate for the next decade. Regent Pacific, which had been short on the Hong Kong stock market for the past two years, had covered its position when the Hang Seng Index fell below the 7,000 level a fortnight ago, he said. 'We have been caught before by these short-term rallies so we did not want to give up all our hard-earned performance this year to a short squeeze,' Mr Mellon said. He said the listed fund manager had become 'less bearish' when the index fell below 7,000 and now had a net neutral position in the Hong Kong market. 'Valuations are less crazy now and it's time to be less stridently negative. We now see the market in a trading range of 6,000 to 8,000 in the next few months. 'The immediate outlook is anybody's guess,' he said after the company's annual general meeting yesterday.