The Hong Kong Futures Exchange's (HKFE) panel of forecasters from 10 banks predicts the three-month HIBOR (Hong Kong interbank offered rate) will be one quarter percentage point higher on 17 April 2000 compared to its level on 15 February 2000. The panel also sees one-month HIBOR rising slightly between now and mid-April 2000. Both forecasts, which suggest an upward bias in Hong Kong dollar interest rates, appear in the latest edition of the HKFE's "HIBOR Futures Market Update" newsletter, published today.

The panellists' average forecasts for the final settlement prices of One-month and Three-month HIBOR Futures on 17 April 2000 show they expect the one-month HIBOR to be 6.12% on that date and the three-month HIBOR to be 6.31%. The forecasts for the one-month rate range from 5.38% to 6.80%, while the forecasts for the three-month rate are between 5.81% and 6.51%. On 15 February 2000, cash market rates for one-month and three-month HIBOR were 6.04% and 6.07% respectively.

In the newsletter's opening article, Mr. Paul Tang Sai On, Senior Economist at The Bank of East Asia, looks at Hong Kong dollar risk premiums. Tang says premiums are likely to remain low in the coming months as more international funds are attracted to Hong Kong by: 1) a broader based economic recovery; 2) a strong local stock market; and 3) the strengthening of Hong Kong's position as a fund raising centre as a result of the local Internet frenzy and China's accession to the WTO.

The newsletter also features a review of the HIBOR futures market and highlights from the HIBOR market participants' meeting on 25 November 1999, which include the following: "Market participants from banks expect greater investors' interest and participation in trading HKD (Hong Kong dollar) derivatives in year 2000, and the trading of Exchange products would benefit from the increasing provision of online trading services by brokerage firms."

"HIBOR Futures Market Update" is published by the HKFE's Economic Research Department. It is available, free of charge, at the Exchange's offices and the HKFE website (www.hkfe.com).

The Hong Kong Futures Exchange is a leading futures and options marketplace in the Asia Pacific Region, with a membership of over 130 companies, including a number of major international institutions. The Exchange is actively diversifying its product base, which now includes currency, interest rate and equity-based products.

For further enquiries, please contact HKFE Corporate Communications: Ms. June Wong 2842 9448 or Mr. Scott Sapp 2842 9421.