HK bourse plunges to its worst low

SINGAPORE, October 23: The crash couldn't have come at a worse juncture. The only stock exchange which appeared to have escaped the jinx wh...

SINGAPORE, October 23: The crash couldn’t have come at a worse juncture. The only stock exchange which appeared to have escaped the jinx which sent the South East Asian markets into a tailspin, completely let down its guard today.

The Hong Kong stock market shed more than 14 per cent value at one point, declining to 9,938.50 — the largest, single-day fall in the history of the exchange. It was a level even lower than the 9,907.81 it had hit in December 1995.

Later in the day, it regained some of its lost ground, suffering a 10.4 per cent decline of 1211 points, closing at 10,426, but not before it had dragged down several regional stocks. The crash came as a shock, despite the 6 per cent decline the index had suffered yesterday. Even as Chief Executive Tung Chee Hwa reacted with his characteristic optimism and assured investors that the crash was only a temporary blip, regional markets told a different story.

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Investor confidence seemed to have been severely shaken, the stock suffering the most being China Telecom (Hong Kong), which was making its debut today on the Hong Kong exchange. It opened today at a rate much lower than its issue price.

The three-month Hong Kong interbank rate soared to 41.25 percent from 10.55 percent on Wednesday. From Monday to Wednesday, the Hang Seng Index had lost 1,963.9 points, or 14.4 percent, to 11,637.11.