VZCZCXRO4797
RR RUEHCHI RUEHCN RUEHDT RUEHGH RUEHHM RUEHNH RUEHVC
DE RUEHHK #0231 0371149
ZNR UUUUU ZZH
R 061149Z FEB 09
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC 6833
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS HONG KONG 000231 
 
SIPDIS 
 
STATE FOR EAP/CM AND EEB/OMA, TREASURY FOR OASIA 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ETRD HK CH
SUBJECT: Hong Kong Market Report: Hang Seng Up on Hope for U.S. 
Stimulus 
 
¶1.  The Hang Seng Index was up 3.61 percent or 476.14 points today, 
closing at 13,655.  Chinese stocks led the rally, following positive 
results in mainland Chinese markets and optimism that a U.S. 
stimulus package would pass Congress.  Hong Kong Shanghai Bank, 
China Mobile, Industrial Commercial Bank of China and PetroChina all 
gained more the five percent.  HIBOR remained low with overnight 
rates at 0.08 percent, one-month lending at 0.22 percent and 
three-month rates at 0.83 percent. 
 
Exports Fall as Manufacturers Brace for Slowdown 
 
¶2.  Hong Kong's total exports dropped by 11.4 percent year on year 
(yoy) in December 2008.  This follows a 5.3 percent decrease (yoy) 
in November.  Domestic exports (i.e., Hong Kong produced goods) fell 
39 percent.  The Federation of Hong Kong Industries announced it 
expects 2,000-3,000 Hong Kong factories in the Pearl River Delta may 
close after the Lunar New Year holiday.  The Ming Pao reported 
February 6 that Chen Hsong, one of the biggest Hong Kong 
manufacturers in Shenzhen, had instructed workers to take one month 
of leave before the Lunar New Year holiday as the factory (one of 
China's largest manufacturers of plastic injection molding machines) 
did not have enough orders to re-open for business. 
 
Looming Roll-over Crisis? 
 
¶3.  Hong Kong Monetary Authority Chief Executive Joseph Yam told 
Legislative Council members February 2 that Hong Kong companies face 
the prospect of rolling over HKD 100 billion (US$13 billion) in 
syndicated loans in 2009.  As the financial crisis continues to 
affect normal lending, Yam worried that Hong Kong borrowers could be 
facing increased credit difficulties.  He offered that the Hong Kong 
government would consider the possibility of providing direct 
support to Hong Kong enterprises unable to roll over existing loans. 
 Hutchinson Whampoa quickly issued a statement assuring investors 
that it had settled HKD 40 billion in short-term loans.  Standard 
Chartered Bank insisted that Hong Kong banks would be able to take 
up the slack by a slowdown of foreign lending.