20 September 1998 AN ANALYST says Hutchison Whampoa - which has recently been promoting the Orange brand in Hong Kong - is planning to form an alliance linking its Personal Communication Service operations in Hong Kong, Britain and the US. This would be done in order to provide a trans-regional PCS service, and to attract other overseas mobile network operators to become its partners. (Commercial Daily) HENDERSON Land Development and Nan Fung Development announce they have verbally agreed to notify each other ahead of price reductions on flat sales in order to avoid damaging price competition. Henderson's chairman Lee Shau-kee had said earlier that Nan Fung had not informed Henderson ahead of selling certain Nan Fung Plaza units at reduced prices. However, Nan Fung said it had already notified Henderson. (Economic Journal) 21 September, 1998 THE Government announces Hong Kong's inflation rate eased further in August to 2.7 per cent, the lowest since data started being collected in 1981. Senior government officials express concern that the real interest rate, or nominal interest rate minus inflation, may rise to 10 per cent by the end of the year, threatening to worsen the recession. (Economic Times) THE Government reveals it has used up to $65.69 billion or 9 per cent of Hong Kong's foreign reserves, to fund last month's stock market intervention. It concedes the huge figure is a result of the market intervention via the Exchange Fund, and its purchase of Hong Kong dollars to meet Treasury demands. (SCMP) ONE World, a global alliance of airlines, including Cathay Pacific, American Airlines and British Airways, is formally launched. In addition, it is announced Dragonair is set to join the alliance within a year, which will allow its members to exploit further the mainland domestic market. (SCMP) 22 September, 1998 CREDIT Suisse First Boston senior economist Tao Dong says Hong Kong Telecom's wage cut plan is only the first wave of a widespread salary cut trend. After this year's sharp fall in property prices, next year's economic deflation will focus on wages. He estimates employees' salaries will fall by 10 to 40 per cent, with real wages possibly returning to mid-80s level. (Economic Journal) THOMSON BankWatch downgrades the SAR's sovereign risk rating from A plus to A minus. It casts doubt on the effectiveness of the recent seven-point measures by the Monetary Authority to improve the fixed exchange rate system, saying the recent deterioration of sentiment towards emerging markets will put further pressure on the peg. (SCMP) SEVERAL brokerage firms are believed to have filed formal complaints with the police, claiming to be victims of an alleged share scam. Sources say an unidentified investor bought Chi Cheung Investment shares in bulk through brokers, which pushed the share price up sharply. He failed to settle the purchases later, triggering a free-fall of the share price. (SCMP) 23 September, 1998 CHEUNG Kong (Holdings) threatens to take legal action against Democratic Party member Albert Chan Wai-yip, claiming Mr Chan's comments on three occasions are 'totally untrue' and 'seriously defamatory'. The company demands Mr Chan to apologise in five newspapers and make 'an unqualified undertaking' not to repeat the statements. (SCMP) INTERNATIONAL Monetary Fund managing director Michel Camdessus says the worst of the economic crisis in Asia is over, and that the worst-hit countries are showing signs of recovery. He sees Japan's economy turning around in the second half of next year. (SCMP) SINO Land reports a 50.8 per cent profit fall to $908.68 million for the year to June 30, after accounting for a $1.3 billion provision for property developments and a $563 million loss on securities investments. Analysts are not optimistic about the company's short-term earnings prospects. (SCMP) 24 September, 1998 LONG Term Capital Management, a hedge fund which has incurred substantial losses in the Russian financial turmoil, receives an injection of US$3.75 billion from New York Federal Reserve Bank in a rescue bid. As the incident may lead to a tightening of bank credit to hedge funds, the Hong Kong Monetary Authority expects this will hurt the financial strength of speculators. (Economic Times) SPANISH investment bank Santander Investment Securities sacks up to 110 employees in Asia, including most of those absorbed from the collapse of Peregrine Investments Holding in February. The bank's retrenchment will also affect 200 staff in Europe and New York, who are considering taking legal action against the bank. (SCMP) THE recession continues to hit Hong Kong's retail sector, with July's retail sales dropping 17 per cent by volume and value year-on-year, worse than economists' expectations. Motor vehicle is the hardest hit sector, followed by clothing and footwear. (SCMP) 25 September, 1998 DRESDNER Bank, of Germany, emerges as the latest investment victim in the US hedge fund Long Term Capital Management (LTCM). News also emerges that Deutsche Bank is joining the effort to rescue the fund with a US$300 million injection. The bank, which has no direct stake in LTCM, says the money will help avert further international turbulance. Dresdner says it made losses of about HK$1.1 billion from its investments in LTCM. (SCMP) THE huge 2.3 million square foot township development in Discovery Bay by HKR International is temporarily halted. The company says falling property prices and uncertainty of the sector's short-term prospects are to blame. (SCMP) COMPILED BY ERIC NG
