27 Sept, 98 THE mainland government unveils new rules designed to crack down on illegal foreign currency transactions, borrowings and loan guarantees. A State Council circular demands stricter supervision by banks over the sale of foreign exchange, reflecting Beijing's increasing worries over the problem of capital flight. (SCMP) THE bailout of US Long-Term Capital Management (LTCM) prompts international banking regulatory authorities to contemplate adopting stringent measures to limit lending to hedge funds. LTCM is understood to have pledged securities purchased on investors' funds, and borrowed more funds to conduct financial transactions amounting to US$1.25 trillion. (Economic Journal) ABOUT 10 warrant-issuing firms are to lobby securities regulators not to apply a new regulation requiring them to cancel warrants repurchased from the market, saying it will sharply reduce liquidity in the warrant market. (Economic Journal) 28 Sept, 98 THE Hong Kong Monetary Authority decides to require foreign banks to disclose financial information by the end of the year. A bank source says bad and doubtful debt, liquidity and year 2000 preparations are to be included in the disclosure list. The HKMA also steps up its scrutiny on bank lendings to hedge funds. (Economic Times) HONG KONG Monetary Authority chief executive Joseph Yam Chi-kwong says a proposal has been submitted to the Hong Kong Association of Banks to gradually adjust the dollar peg exchange rate from HK$7.75 to $7.80 against the greenback. The rate will be changed at the rate of one basis point per day, for 500 days, starting from mid-March next year. (Economic Times) IN a bid to stabilise the yuan and shore up the country's foreign exchange reserves, People's Bank of China orders domestic firms involved in foreign trade and overseas-listed state companies to repatriate foreign-exchange holdings by Thursday, or they will face punishment. (SCMP) 29 Sept, 98 HENDERSON Land Development announces a net profit of HK$4.92 billion in the year to June 30, almost half of the previous year's, due to a sharp fall in property sales and $1.59 billion in provisions on property and securities investments. (SCMP) BOTH Midland Realty and Centaline Property report turnover decline of more than 60 per cent in the first half from last year. However, while Midland has recorded a loss of more than HK$20 million, Centaline made a $15 million profit, mainly because the latter rented, instead of buy its office premises, and hence does not have to make provisions for property. (Ming Pao) ANALYST Pan Ming of Prudential-Bache Securities estimates the Government has spent up to US$5 billion in the futures and equity markets in September, further depleting its reserves. However, Hong Kong Monetary Authority officials say there have been no official market activities since August 28. (SCMP) 30 Sept, 98 THE Hong Kong General Chamber of Commerce is understood to have issued a zero salary increase recommendation to its member companies. Dickson Concepts International also announces salary cuts for its 1,600 employees, while five locally-listed companies announce lay-offs of 243 staff. (Economic Times) THE International Monetary Fund predicts Hong Kong's economy to decline 5 per cent this year, while no growth is seen for next year. In addition, it criticises the Hong Kong Monetary Authority's recent stock market intervention as 'counter-productive'. (SCMP) KWONG On Bank announces its controlling shareholder, Japan's Fuji Bank, is negotiating on the sale of its 50.13 per cent stake, estimated to be worth about HK$996 million. Kwong On's shares jump 17.8 per cent to close at $5.30, before trading was suspended. (SCMP) 1 Oct, 98 US FEDERAL Reserve chairman Alan Greenspan justifies the Fed's decision to broker a US$3.5 billion rescue of hedge fund Long-Term Capital Management, saying its collapse could have 'triggered a seizing up of markets'. (SCMP) INTERNATIONAL Monetary Fund managing director Michel Camdessus says there is room for more interest rate cuts in the US and Europe. He says he would welcome other bilateral programmes to help rebuild global economic growth. (SCMP) DESPITE a 0.25 per cent reduction in US interest rates, investors worry that economic recovery is no where in sight. Global stock markets plunge in concert in the wake of a near 3 per cent loss in New York in the previous day's trading. (Ming Pao) 2 Oct, 98 DUTCH financial services provider ING Group announces it will cut 1,200 staff worldwide in its emerging markets operations of investment banking arm ING Barings. The group says the cuts will impact every area of the bank all over the world, including Hong Kong. The news comes as the group reduces its forecast for this year's earnings per share growth to 15 per cent from from the 30 per cent to 35 per cent it predicted in the previous week.(SCMP) Long-Term Capital Management claims its biggest victim so far when Mathis Cabiallavetta, the chairman of UBS, Europe's largest bank, is forced to resign. Earlier revelations that UBS had written off HK$5.39 billion because of its exposure to the bank sparked an internal audit, which the bank says revealed 'shortcomings' in the group's risk management. The bank said it found no evidence of gross negligence but said Mr Cabiallavetta resigned on his own accord, 'as a step towards rebuilding confidence.' (SCMP)
