Financial Secretary John Tsang said yesterday the SAR government had no plans at the moment to rescue the stock market like it did 10 years ago but it had geared up supervision on brokers.

"The Hong Kong government has not stepped in today," Tsang told reporters, adding that the government had no plans to do so.

During the Asia financial crisis in 1998, Hong Kong government bought a bulk of shares to help revive the market confidence and combat global speculators who were looking for gains by breaking the territory's currency peg to the greenback.

Though the government doesn't want to intervene right now, it has tightened supervision on brokers and kept an eye on their financial position, Tsang said.

"The Securities and Futures Commission (SFC) will ensure that the brokers comply fully with capital requirements," he said.

Analysts said some of the city's brokers might have faced funding pressure as fund managers kept offloading their holdings regardless of a heavily oversold situation.

"The stress test of course helps regulate the market, particularly at such a sluggish time," Ronald Wan, head of research of Bank of Communications International, told China Daily.

However, if any broker in Hong Kong faces any financial problem, the investor confidence will slip to a new low and trigger larger sell-offs, he said.

SFC said on Wednesday night that it had been in touch with major retail-based brokers and they had reported orderly transaction and trading.

Tsang also stressed yesterday that the stock and derivatives markets continued to operate normally.

(HK Edition 09/19/2008 page1)