Weekly Review

HSI Weekly Movement	Weekly Market Statistics

Review & Outlook of Market Performance

With the US announced a mild increase in employment figures which suggested a less likely chance for further US rate hikes in the next FOMC meeting on 22nd August 2000, the HSI started the week strongly on Monday, up 302 points to close at 17,727.25. However, futures related trading ahead of C&WHKT shares ceasing trading on Tuesday, 8th August 2000 pushed the market down more than 500 points or 2.9%. On Tuesday, share price of C&WHKT was down 11.64% while PCCW was down 7.9%. In addition, the fall in HSI was further aggravated by the fall in share price of China Mobile, which recorded w-o-w 4.25% drop. The finance and property sectors, however, bucked the trend with the finance sub-index and property sub-index closed up 4.7% and 4.2% w-o-w respectively. During the week, it was announced that Pacific Century Group Holdings had placed 1% or 240 million existing shares of PCCW at a price of HK$15.811 each. It was believed that some 145 million of the PCCW shares were taken up by the Tracker Fund of Hong Kong. Both HSCCI and HSCE index gained 4.4% and 7.3% w-o-w to 1,425.5 and 536.9, respectively. The GEM index rebounded by 2.7% w-o-w to 473.52 on the back of renewed interest on high tech stock following good results announced by Cisco in the USA.

In US, it was announced that there was no change in July producers’ price index, while core index was up 0.1%. In addition, July retail sales was up 0.7%. On Friday, the US market responded positively to the figures with the Dow and Nasdaq index up 1.1% and 0.8% to close at 11,027.8 and 3,789.5 respectively. We expect the firming up of the US market should lend some support to the local bourse next week. Nevertheless, we see the HSI likely to continue range-trading next week as the HSI is still capped by the 20 day moving average of 17,430. We see strong support at 17,000 level. The market seems still lacking further market incentives to move further ahead amid the market should have discounted for no change in US rates in August.

US & Regional Markets Weekly Update

Index Weighting Changes (week ended 11th August 2000)

Hang Seng Index (HSI)

Stock	Stock Code	Closing price @11/8/00 (HK$)	W-O-W Changes		Remarks / Comments
			Absolute	%
			(HK$)
PCCW	1186	$16.0	-$1.4	-8.1		Investors were hesitant to buy the stock after it had placed 240m shares on Tuesday.
Cathay Pacific	293	$15.85	-$1.65	-9.4		Despite the counter reported a strong net profit growth, investors concern whether such growth could be sustainable.

Hang Seng China Affiliated Corp Index (HSCCI)

Stock	Stock Code	Closing price @11/8/00 (HK$)	W-O-W Changes		Remarks / Comments
			Absolute	%
China Merchants	144	$6.25	$0.05	+0.8	The increase of the share prices was a result of better than expected 1H00 results announced by both companies.
China Overseas	688	$0.97	$0.04	+4.3

China Enterprise Index (HSCE)

Stock	Stock Code	Closing price @11/8/00 (HK$)	W-O-W Changes		Remarks / Comments
			Absolute	%
Yizeng Chemical Fibre	1033	$2.40	+$0.05	+2.1	Rumour had it that the company would merge with Yantze Petrochemical.
Shanghai Fudan Microelectronics	8102	$3.65	+$1.74	+91.1	Investors were confident to the prospect of the company’s smart card and integrated circuits businesses.

Summary of US News

Indicator	Change/Index	Comments
Productivity	5.5% q-o-q	The figure was the highest since 1973.
Cost of labour	- 0.1% q-o-q	The higher productivity led to a fall in cost of labour.
PPI	0% m-o-m	PPI remained unchange mainly due to a fall in energy price.
Retail sales	0.7% m-o-m	After a fall of retail sales in 2Q00, it seemed like the figure began to pick up.

Forthcoming Important Announcements / Events

14th August, 2000 (Monday)

Retail sales - June

15th August, 2000 (Tuesday)

Industrial production - July

Capacity utilisation - July

Provisional unemployment for April to June

Beijing Yanhua (0325) - Interim results

16th August, 2000 (Wednesday)

Hewlett Packard - 3Q99 results

CPI index - July

Real earnings - July

Liu Chong Hing Bank (1111) - Interim results

Shanghai Petro-Chem (0338) - Interim results

17th August (Thursday)

Housing starts - July

Initial jobless claims 13/8

Li and Fung Ltd (0494) - Interim results

Cheung Kong Infrastructure (1038) -Interim results

18th August, 2000 (Friday)

Trade balance -June

Vanda System (0757) - Interim results

Anhui Expressway (0995) - Interim results

Disclaimant

This report has been prepared solely for information purposes and we are not soliciting any action based upon it. Neither this document nor its contents shall be constructed as an offer, invitation, advertisement, inducement or representation of any kind or form whatsoever. The information is based upon information which we consider reliable, but accuracy or completeness is not guaranteed. Opinions expressed herein are subject to change without notice. East Asia Securities Company Limited and other associated with it may have positions in the securities of the company or companies mentioned herein.