The Government's main purpose in setting up an Exchange Fund Investment company is to draw a dividing line between the administration and the management of the newly-acquired share portfolio.
It is a necessary step to avoid any conflict of interest claims. But like most of the Government's recent actions, it is somewhat lacking in real force and precision.
Apart from the appointment of the directors, and a few sketchy details about the aims and purpose of the company, the real question that the market is asking has yet to be answered. It is two months since the Government made its controversial, but apparently successful, interventionist move. Yet the details of which stocks it holds remain a mystery. Donald Tsang Yam-kuen, the Financial Secretary, has promised to disclose the shareholdings 'as soon as market conditions permit', but it is hard to see any reason for withholding the information any longer.
Hong Kong is the world's fifth largest stock market, and when the Government holds minority stakes in 33 major companies, details of how the portfolio is spread should be known. It creates an ill-informed market, and that is not calculated to increase confidence.
Since Mr Tung is keen on co-opting international figures as advisers, it might have been more ground breaking to have called on some financial experts from outside the SAR to join the new board. But it could be difficult to tempt the big players to a body with limited powers.
Even so, since they would act only in an advisory capacity, a sprinkling of names from the big investment banks would have given the company more teeth.
