Hong Kong: How I saw off the speculators, by Donald Tsang
Just over half a year after the Hong Kong government entered the stock market, driving up prices and squeezing speculators' short positions, much of the indignation that greeted the move seems to have evaporated. The Hang Seng index trades in a steady range of 12,000 to 13,000, double its level when the government intervened, and the currency is stable.
Have the free marketeers of Hong Kong been won over by the success of the policy? To find out, Euromoney polled the cream of Hong Kong's financial services community. Participants included the chief executives of two of Hong Kong's biggest conglomerates, and one of the city's biggest property developers; two of Hong Kong's most powerful commercial bankers; and high-profile investors. A total of 40% of those questioned were investors.
We asked them two questions. First, was the Hong Kong government right to intervene in the stock market? Second, given the current relative stability of the stock market and the currency, did the end justify the means? On both counts, a majority support the government's actions.
To the first question 56% replied yes and 44% no.