Hong Kong Market Closes for Rest of Week
HONG KONG (AP) _ Trading was suspended today on the Hong Kong Stock Exchange for the rest of the week to halt further panic selling after share prices in this British colony and around the world registered spectacular declines.
The exchange’s general committee unanimously decided at an early morning emergency meeting to suspend trading through Friday. The market did not open today, and the exchange floor was eerily quiet with few employees on hand.
Exchange chairman Ronald Li told a government-run radio station the decision was designed ″to protect the investors and to allow the brokers to have time to settle the backlogs. We need the time.″
The announcement followed a day of panic selling that sent the exchange’s key Hang Seng Index down 11 percent, or 420.81 points to 3362.39, a record one-day plunge.
″I think it’s better to have this suspension, so that we can get some order back to the market,″ said Hong Kong Financial Secretary Piers Jacobs. He added, however, that suspending trading until next week ″does seem rather a long period of time.″
At least one company offering unit trusts of Hong Kong stocks reported a deluge of people seeking to redeem their shares today.
″It’s a general panic. People quite understandably hate losing money,″ said Tom Waring of Gartmore Fund Managers (Far East) Ltd. ″Investor confidence will be severely shattered.″
Hong Kong Secretary of Monetary Affairs David Nendick acknowledged ″we’re dealing with a situation that is unprecedented on a worldwide basis,″ but he remained optimistic about the local economy, which the administration has predicted will grow by 12 percent this year.
Nendick added, however, that a world recession triggered by collapsing stock markets would harm the territory’s export-fueled economy.
Marc Faber, managing director of the international securities company Drexel Burnham Lambert (HK) Ltd., criticized the decision to close the exchange, saying, ″Every other market in the world has stayed open.″