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

    The Government announced today (February 28) its financial results for the ten months ended January 31, 2005.

    There was a surplus of $25.2 billion in January, thereby bringing a net surplus of $22.4 billion up to end of January.  Expenditure for the period April 2004 to January 2005 amounted to $200.2 billion and revenue to $222.6 billion.  The revenue for the period, and thus the surplus, have taken account of the $6 billion Toll Revenue Bond and $20 billion Government bonds and notes issued in May and July 2004 respectively.

    A Government spokesman said that the surplus of $25.2 billion for the month of January, 2005, reflected the Salaries Tax and Profits Tax receipts.  He added that an assessment of the likely result for the current financial year would be provided by the Financial Secretary in his Budget Speech on March 16, 2005.

    The fiscal reserves stood at $297.8 billion at January 31, 2005.

    More detailed figures are shown in Tables 1 and 2.

TABLE 1.  CONSOLIDATED ACCOUNT

                                              Year to date 
                           Month ended        April 1, 2004 to 
                           January 31, 2005   January 31, 2005
                           ----------------   -----------------
                              HK$ million         HK$ million
Revenue                         46,381.4            222,604.3
Expenditure                    (21,204.3)          (200,190.5)
                             -------------       --------------
Surplus                         25,177.1             22,413.8
                             -------------       --------------

Financing
 Domestic
   Banking Sector (Note 1)    (23,740.1)           (22,785.8)
   Non-Banking Sector          (1,437.0)               372.0
 External                           -                    -
                            --------------       --------------
Total                          (25,177.1)           (22,413.8)
                            --------------       ---------------

Government Debts as at January 31, 2005 (Note 2)
 HK$25,750.8 million

Debts Guaranteed by Government as at January 31, 2005 (Note 3) 
 HK$5,001.1 million

Notes:

1.  Includes transactions with the Exchange Fund and resident banks.

2.  The total Government debts of $25,750.8 million as at January 31, 2005 comprise:

(i)  Toll Revenue Bond of $5,750.8 million to be repaid to Hong Kong Link 2004 Limited by the net toll revenue receivable of Government tolled tunnels and bridges.  Of the outstanding Toll Revenue Bond, $450 million will mature within the next 12 months and the rest will mature by May 2016 but may be fully repaid before then; and

(ii)  Retail bonds and institutional notes totalling $20 billion (including US$1.25 billion denominated in United States dollars).  The maturity dates of these bonds and notes fall within the period July 2006 to July 2019.

3.  Guarantees provided under the Special Finance Scheme for Small and Medium Enterprises, the Self-employment Business Start-up Assistance Scheme, the SME Loan Guarantee Scheme, the Film Guarantee Fund and the Loan Guarantee Scheme for Severe Acute Respiratory Syndrome Impacted Industries.

TABLE 2.  FISCAL RESERVES

                                              Year to date 
                           Month ended        April 1, 2004 to 
                           January 31, 2005   January 31, 2005
                           ----------------   -----------------
                              HK$ million         HK$ million
Fiscal Reserves at start 
 of period                     272,579.4           275,342.7

Add: Consolidated Surplus        25,177.1            22,413.8
                             -------------        -------------
Fiscal Reserves at 
 end of period                 297,756.5           297,756.5
                             --------------       --------------

Ends/Monday, February 28, 2005

NNNN