• U.S.

Business: The Hong Kong Bull

2 minute read

The stock market in Hong Kong, unlike other exchanges in the world, thrives on ill fortune. As one of the last citadels of free enterprising Chinese businessmen, the market turns bullish when the political situation elsewhere is too shaky for Chinese investments. The market soared in 1949 when Shanghai bankers arrived, suitcases crammed with currency, only steps ahead of the Communist armies. It was soaring again last week. Reasons: 1) the waves of discrimination against Chinese merchants, which are ripping across Southeast Asia, and 2) high taxes that make investments in Singapore and Malaya unprofitable. Worried about their future, Chinese from Manila to Bangkok are smuggling out their money to Hong Kong.

Under the impact of the sudden influx of cash, the Hong Kong market has surged upward in the past three months, now averages a $1,000,000-a-day turnover, more than three times the preboom volume.

Hottest listing on the board, which contains only local stocks is Kowloon Docks, which last week declared a 35¢ dividend and $1.40 bonus, at once leaped to $16.47, a week’s gain of $3.68. Other active stocks are local telephone and textile companies.

The first exchange was founded in Hong Kong as an all-British club in the 1890s. Later another exchange was organized, and gradually Chinese gained admittance to both. After World War II the two exchanges were merged into the present 60-seat establishment, which is dominated by the 45 Chinese members and guided by Chairman Noel Croucher, a 69-year-old Briton who has been active in Hong Kong trading since 1913. Despite the fact that Hong Kong is a cutthroat market, Croucher contends that it is a safe place for money, if all the risks of stock speculation are taken into account. He has never heard of a Chinese broker who “went back on his word or broke his bond.”

More Must-Reads from TIME

Contact us at letters@time.com