**********************************************

Following is the full text of a speech (English only) delivered by the Financial Secretary, Mr Donald Tsang, at the launching cermeony of Hong Kong Exchanges and Clearing Limited today (Monday):

Charles (Lee), Ladies and Gentlemen,

Today marks a major landmark in our drive to become Asia's leading securities and futures market and to be among the top five equities exchanges in the world. Hong Kong Exchanges - the new symbol of unification - has upgraded Hong Kong to the centre stage of the global financial market in the 21st century.

It has been a long tortuous journey for our securities market to arrive at this point since it came into being more than a century ago. The Hong Kong Exchanges now represents a new and consolidated entity that is committed to competitiveness and efficiency. It aspires to deal with the growing demands from the globalised market as well as the needs of sophisticated investors both here and overseas with the latest innovation and technology.

Our securities and futures market took enormous strides last year. We laid out ambitious plans for reform and consolidation just one year ago. Few at that time believed we would succeed. You have proved them wrong. The completion of the reform made breathtaking news worldwide. This achievement will go down in our records as another fine example of Hong Kong people's determination, single-mindedness and renowned pragmatism.

I feel exceedingly proud of ourselves today because we - the Government, the industry and the Legislative Council - have been humble enough to learn the lessons of the financial crisis which devastated Asia in 1997 and 1998. We know in the new world of securities trading, strength comes from size and technology, as well as transparency and integrity. Market forces are revolutionising the mode of trade. Technology has demolished traditional market boundaries. And investors are turning global and demanding the best, the safest and the fairest intermediary services. In other words, we could either embrace the change and move with the time or stand still and fall into oblivion. Hong Kong has readily chosen the former. We have also shown the world that we could take the pain, in taking on the fierce competition in the international financial arena, we cannot afford to be the second best.

The creation of the Hong Kong Exchanges has brought to the industry economies of scale; higher efficiency and savings in infrastructure investment; strengthened hedging and risk management; as well as providing greater financial support to meet external competition. It has also deepened the pool of liquidity, opening up opportunities to create new products and services. It has streamlined its own professional management and organisation and promoted greater transparency, accountability and market discipline.

The confidence among our brokerage community in this reform exercise guarantees the success of Hong Kong Exchanges. I am delighted to hear that the overwhelming majority of the members of the Exchanges have decided to opt for shares in the new company rather than taking the cash alternative. No doubt you are exercising your legendary instinct in profit making and foresight.

So, today, the Hong Kong exchange industry enters a vital new phase in its advancement. The future is hard to predict. But all the signs, including recent activities in the GEM, augur well for this change.

And one final thought. I'm sure many of you are anxious to know in advance what may, or may not, be in my Budget Speech, particularly in relation to stamp duties and levies on stock transactions. I have to keep you in suspense for a day and a half more. Please don't try to read anything into what I say today. Speculation may be harmful to your health.

Once again, my warm congratulations and sincere thanks to everyone involved in the Hong Kong Exchanges project, particularly Mr H C Lee, Dr Geoffrey Yeh, Mr John Chan, and last but not least Mr Charles Lee. Without their capable and persistent leadership, the merger would not have been possible. It is a great accomplishment and one which bodes well for Hong Kong's reputation as a leading international financial centre.

Thank you.

End/Monday, March 6, 2000

NNNN