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The Hong Kong Monetary Authority (HKMA) and Exchange Fund Investment Limited (EFIL) announced today (Tuesday) that with effect from January 2003 the management of the Exchange Fund's long-term Hong Kong equity portfolio will be transferred from EFIL to the HKMA.

The HKMA will continue to manage the Hong Kong equity portfolio through the existing external fund managers originally appointed by EFIL. These fund managers will continue to manage their portfolios in accordance with the existing investment guidelines.

EFIL's operations will be wound down accordingly by the end of January 2003, and the staff of EFIL, who are HKMA's secondees, will return to the HKMA.

"EFIL has played a key role in the successful completion of the Exchange Fund's Hong Kong equity disposal programme. We are particularly grateful to the Honourable Yang Ti-liang, the Chairman of EFIL, and his fellow Directors for their dedicated work in accomplishing the difficult mandate of returning a very large portfolio of shares to the market with minimal disruption. Following the transfer of the portfolio to the HKMA we shall continue to manage it in a prudent manner through external fund managers," said Mr Joseph Yam, the Chief Executive of the HKMA.

The Honourable Yang Ti-liang, the Chairman of EFIL, said, "I would like to take this opportunity to thank my fellow Directors and the staff of EFIL for their invaluable contribution to the completion of the disposal programme over the past four years. EFIL has been very successful in accomplishing its mission and, going forward, it is appropriate and cost-effective to transfer management of the investment portfolio back to the HKMA and wind down EFIL's operations."

For further enquiries, please contact:

Fiona Chan, Chief Corporate Development Manager, at 29120165.

Thomas Chan, Senior Manager (Press), at 28781480.

End/Tuesday, December 3, 2002

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