Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong yesterday snuffed out hopes of an early end to Government intervention, saying the clash with international speculators would be a 'long-term battle'. The Government intervened for the third straight day yesterday, driving blue chip share prices up a further 5.71 per cent despite limited speculative pressure on the Hong Kong dollar. 'We will continue these actions until the speculators have completely left the Hong Kong market,' Mr Yam said. 'We [the HKMA] have to continue to intervene in the stock and futures markets until the speculators have wound up their short positions.' By boosting the Hang Seng Index, the Government hopes to force speculators to take big losses when the August index futures contract expires on the 28th. Speculators, however, can instead opt to raise the stakes and carry their positions over into the following month. Market players said that was exactly what they were doing - which meant they were also willing to prolong the battle. 'A lot of short positions were rolled over into September today,' a trader at one of Hong Kong's leading futures trading houses said. 'Time is on their side.' A sales director at a leading futures trading house said: 'The idea is all the August positions were going to be squeezed but they're just rolling over . . . it's difficult to see how it will finish.' Mr Yam said the HKMA was willing to hang in for a protracted battle being waged with the Exchange Fund's HK$659.5 billion in reserves. 'I expect this would be a long-term war. It will take time to squeeze out the speculators,' he said. Yesterday's intervention surprised the market as pressure on the Hong Kong dollar declined and interbank rates eased as the yen rose. OCBC Securities associate director Alvin Owyang said: 'I'm seeing the Government again participating in the market. They never seem to stop amazing us.' The Hang Seng Index jumped 411.66 points to 7,622.58 yesterday, taking its gains since the Government started buying stocks on Friday to almost 15 per cent. There was no sign of speculation in the currencies market yesterday but Mr Yam said speculators have not left the market. 'The speculators sold short a lot of Hong Kong dollars earlier and have not settled their positions,' he said. Government intervention in the stock and futures market is aimed at breaking a cycle in which bets against the Hong Kong dollar drive up interest rates, pushing the stock market down. The same speculators then profit from short positions in Hong Kong's stock market. As the Government and speculators prolonged their battle, fund managers and other long-term investors were being forced to the sidelines, brokers said. They said the $6.93 billion turnover was on the strength of Government buying, short-covering, profit-taking and short-term trading. 'Some of the short-term traders are drifting back in because they're beginning to feel the market will be supported to the end of the month,' a sales director said. 'But fund managers are upset . . . they want to buy at lower levels, realistic market levels.' With the rules of the game changed, fund managers say the risk premium is too high to enter the market. Sun Hung Kai Asset Management director Vincent Koo Wing-pat said: 'As traditional fund managers we just can't risk playing the market day by day . . . actually hour by hour.'