HK anger over drop in credit rating
Saturday 21 February 1998
Sir Donald Tsang, Hong Kong's financial secretary, described the move as "unfair, unreal and improper". He accused Moody's of simply including Hong Kong "in the same broad brush of all the other countries affected by the currency crises", ignoring the stability of the Hong Kong dollar.
Moody's said the downgrade resulted from increased volatility in East Asian markets, which was affecting the Hong Kong environment. However, the agency noted that the territory's "fiscal situation and regulatory environment remain sound".
Short-term debt of the two Hong Kong railway corporations, previously blue-chip rated borrowers, has been downgraded from Prime-1 to Prime- 2. The outlook for foreign currency borrowings of these two institutions and other prime Hong Kong borrowers has also been downgraded from stable to negative.
Although there was considerable surprise at these revaluations, investors seemed less concerned than the Hong Kong government. The stock market inched marginally upwards after a day of lacklustre trading. The benchmark Hang Seng Index rose 0.6 per cent to 10,551.70. Stocks likely to be affected by the Moody's re-rating showed no sign of being marked down.
Moody's also raised some eyebrows by reclassifying the outlook for China's bonds, notes and bank deposits from stable to negative.
Meanwhile, Japan's ruling Liberal Democratic Party has dashed hopes by producing an economic stimulus package which fell far short of expectations.
The package, issued yesterday, contained neither the tax cutting or increased government spending measures which were anticipated by the financial markets. The stock market responded apathetically, ending the day up less than 1 per cent.
The package focused on deregulation measures and a clutch of soft loans to troubled East Asian countries.
- 1 Mario Balotelli: Staff at arson-hit Manchester Dogs' Home convinced Liverpool striker is behind five-figure donation
- 2 Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
- 3 iOS 8 is full of shiny new features - but it's terrible news for app developers
- 4 Friends 20th anniversary: Six things we wouldn't have without influential comedy series
- 5 Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Scottish independence referendum results: David Cameron pledges plans for 'English votes for English laws' by January
Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
Scottish referendum results: David Cameron set to unveil major devolution of powers to England
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...