HK dollar ends day's highs

The Hong Kong dollar gave up early gains to trade lower on Thursday afternoon, partly due to weakness in the stock market.

The local currency was trading at 7.8083/85 against the US dollar at 0840 GMT, slightly softer than the late Wednesday trade in Asia.

It had touched a high of 7.8040 in the morning session when the US dollar weakened against major currencies.

Interbank rates were generally lower, particularly at the longer-dated maturities, as investors scaled back expectations of a Federal Reserve interest rate increase any time soon.

The three-month interbank rate fell to 2.29/2.34 percent, off a high of 2.46 percent struck on Monday morning.

The one-year rate edged lower by 6 basis points from Wednesday's close to 3.20/3.25 percent.

MPF scheme research

An increasing number of employers choose Mandatory Provident Fund (MPF) plans with more funds as employees' knowledge of the saving scheme becomes more sophisticated, according to HSBC Insurance General Manager and Head of Employee Benefits Luzia Hung.

Hung said that at the beginning of the scheme, 85 percent of employers chose MPF plans with five funds, while currently 20 percent have shifted to plans with more fund choices.

However, she admitted that the prevalent trends seem to be for plans with less fund choice, but rather specialized management of allocation.

Also, employees are becoming more comfortable shouldering the risks in their MPF portfolio.

Hung said that in 2001, 40 percent of the total portfolio money went into capital-preservation funds, but the number has dwindled to less than 25 percent today.

Hana to buy Jilin Bank

Hana Financial Group, South Korea's fourth largest banking group, is in the final stage of negotiations to buy up to a fifth of the Bank of Jilin in northern China and become its controlling shareholder, two executives with the Chinese lender said on Thursday.

If an agreement is reached, it would mark a rare case of a foreign firm gaining control of a government-run lender, with Beijing mostly limiting overseas investors to minority stakes.

Bank of Jilin plans to sell new shares to Hana Bank, the banking arm of the Hana Financial Group, which would own as much as 20 percent of the lender's enlarged share capital once a deal is completed, said Bank of Jilin executives with knowledge of the plan.

Reuters-China Daily

(HK Edition 06/20/2008 page2)