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FINANCIAL SERVICES | Cesar Tordesillas, Hong Kong

Tsang warns investor on market fluctuations

Financial Secretary, Mr John C Tsang, said that the Government would keep a close watch on developments globally, and continue to monitor the local market to ensure its smooth operation.

He was reacting to the volatilty of the stock market that saw Hong Kong's share prices drop by 939 points with a turnover of $124.8 billion.

"The fall in share prices was triggered by market conditions worldwide and a plunge in share prices in the United States and Europe. The market is worried about a deepening of the Euro-zone sovereign debt crisis and reduced confidence in the prospects of the United States economy, particularly in view of the sustained decrease in the Purchasing Managers Index. This is the main cause of the fall in share prices in Europe and the United States," he explained.

Mr Tsang stressed that the fundamentals of the Hong Kong economy are strong and trading of shares was conducted in an orderly manner today. The results of the regular stress tests for banks and the securities sector conducted by the Hong Kong Monetary Authority and the Securities and Futures Commission respectively showed that the industry was capable of responding to market fluctuations.

"Investors, in particular small investors, should beware of the market fluctuations. They should exercise caution and act sensibly. We will continue to monitor the operation of the market to ensure its smooth operation," he said.

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