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Following is the transcript (English part) of a stand-up media session given by Secretary for Financial Services and the Treasury (SFST), Mr Frederick Ma, after attending a radio programme this morning (January 10):

Question: A question about securitisation. Is this proposal, after it has been rejected by the Legislative Council, for the time being dead?

SFST: I want to clarify that the Legislative Council did not reject the proposal. All they want is more information, which we are very happy to provide. Upon the receipt of the information from us, I am convinced that they would let the resolution go ahead and the process would continue.

Question: When will you be providing any information and what is it?

SFST: Whatever information the Legco members would like, we would provide as soon as possible. We learnt about this yesterday afternoon, and we would work right away and provide them with the relevant information they want.

Question: Does it reflect that there is a breakdown of some sort, indicating perhaps relationship with Legco isn't working so close as it should?

SFST: I don't think it has anything to do with relationship. It is merely the fact that they want more information. We went before the Legco Panel on Monday, we subsequently provided a paper, a rather detailed paper to them on Thursday. And yet they want to have more information. That is fine, that is their prerogative.

Question: What will be the effect if the proposal is rejected? What is the effect on the revenue?

SFST: If the proposal, on a hypothetical case, is rejected, that means we can't proceed, which means that we would not be able to get the amount that we want, i.e. $6 billion, but on the other hand we would continue to get the recurrent income.

Question: Would you be able to offset that $6 billion through any other way, in terms of the market doing better?

SFST: For this year, return on investment of our fiscal reserve is much better than we expected. The original assumption was 4.5%, the result indicated so far has far exceeded that amount, and on top of it we have collected more revenue from stamp duty because of the buoyant stock market and improved property market. Therefore, actually the pressure is not as great as before.

Question: How much does it mean exactly? Just an estimation?

SFST: Because the fiscal year is not over yet, I don't think it is appropriate for me to give you the exact amount. But all I can say is, as I said, the return on our investment far exceeded the original forecast.

Question: Far enough that we can see a reduction of the deficit?

SFST: I can't give you a number because as I said the fiscal year is not over yet. But, let me put it this way, compared with six months ago, the situation is much better.

Question: The decision to resume land sale, is it in any way connected with the possible loss of revenue, that is to offset the possible loss due to hold up of securitisation of tunnels?

SFST: No, I don't think so.

Question: What do you expect from the land sale?

SFST: The property market is doing better. Obviously we would hope that from the land sale we satisfy the market demand and at the same time we generate revenue for the Treasury.

(Please also refer to the Chinese part.)

Ends/Saturday, January 10, 2004

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