Following is a transcript of remarks by the Chief Executive, Mr Tung Chee Hwa, after a luncheon speech at the Hilton Hotel in Kuala Lumpur today (Thursday):

I arrived here in Kuala Lumpur yesterday. I am departing later on this afternoon for Singapore. I had a very useful visit, very productive visit. I'm grateful to the Malaysian Government for the very warm hospitality they have accorded to me and to my colleagues.

I am also grateful to the Chinese Ambassador who has gone out of the way to make my visit here very welcome.

While I was here I had an opportunity of talking with the Prime Minister, the Deputy Prime Minister, the Foreign Minister and Minister of Transport as well as leaders involved in finance and in trade in Malaysia. We had some useful discussions.

I explained to them, in Hong Kong business is as usual. Government is functioning as normal, economy continues to expand and our lifestyle which we are accustomed to has not changed. Things are going very well and I am glad they were happy with this message. They, too, share our confidence of the future.

We also talked about how to, obviously, deepening and strengthening the Hong Kong-Malaysia relationship because this trading relationship is becoming very important.

We also discussed about other matters of mutual concern that the Malaysian Government will give us visa-free arrangement for the SAR passport, the details of which we will be announcing shortly.

We also discussed about the ups and downs in the financial market and the point I want to make is that the financial market goes up and down but Malaysia's fundamentals are very good, so in due course I'm sure it will be fine.

Two English questions, two questions in Chinese, then you have to go to catch a plane.

Question: (Perry Chow TVB Hong Kong) The visa-free arrangement. What is the time frame, are the details? Are we talking about an announcement in September and will it be a better arrangement than the present one?

Mr Tung: It will be announced very, very quickly. The details, please wait patiently. It will be coming soon, quickly.

Question: (Malaysian reporter) There is a general belief that Malaysian leaders are over-reacting to the economic crisis in the country now, what do you have to comment on that, sir?

Mr Tung: Well, as I said, it is understandable that you feel the pain and frustrations of what has happened. But I would like to emphasise the fundamentals in Malaysia are good, the fundamentals all over Asia are very good so we should look forward with confidence.