Stockbrokers and legislators welcomedthe suspension of trading on the local market after Monday's
record fall, but some said the suspension was too long and
could harm the territory's reputation as a financial centre.
    Announcing the suspension until next Monday, stock exchange
chairman Ronald Li said earlier today "This will protect
investors and allow brokers to settle a backlog of orders."
    But legislator David Li, who is also managing director of
the Bank of East Asia, while weloming the move, said a one-day
halt would have been enough.
    "I believe the exchange is over-reacting. A long suspension
will damage Hong Kong's reputation as a financial centre and
hurt foreign investors' confidence," David Li said.
    Legislator Hui Yin-fat echoed this view. "What will they do
if the market resumes its fall next week ?" he asked.
    Legislator Lee Yu-tai said small investors would be
hard-hit by the decision. He said some were paying interest on
loans to purchase stock and a long suspension increased their
losses.
    Financial Secretary Piers Jacobs said the decision was
explainable, but he added, "It does seem rather a long time."
    However, George Tan, assistant director of Greenwell
Montagu (Far East) Ltd, said the suspension was wise. "Hong Kong
is a volatile market and this will let things settle down," he
said.
    Other brokers agreed. "At least this gives us a bit of
breathing space," said one.
    John MacKenzie, chairman of the Hong Kong Association of
Banks, said "I feel that it is not at all a bad thing that
investors and investment mnanagers be given a breathing space."
    Hong Kong's main share indicator, the Hang Seng index, fell
420.81 points to 3,362.39 on Monday - its biggest ever one-day
fall in real terms.
 REUTER
