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Deposits soar after flotations

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HONG Kong dollar deposits recorded strong growth of 15 per cent in November, the result of three flotations and the flow of foreign capital into the buoyant local market.

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Removing the effect of large flotations, which has distorted the real deposit growth picture, economists detect signs that sluggish Hong Kong dollar deposit growth is slowly picking up.

The three flotations - Kunming Machine Tool, Consolidated Electric Power Asia and Esprit - tied up $181.9 billion in application money.

The growth in deposits contrasts with the 0.9 per cent recorded in September and 11.7 per cent in October, according to Hong Kong Monetary Authority statistics.

Demand deposits fell by 29.8 per cent during November, due to the refunding of application monies for a share issue launched in late October.

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''The application monies of Maanshan Iron and Steel were put in demand deposit in late October. That accounts for the drastic fall in November when the monies were released,'' said Priscilla Chiu, senior economist in the Monetary Authority.

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