On Wednesday ANZ noted that "the..........>

HONG KONG: On Wednesday ANZ noted that "the Assessing Reserve Adequacy (ARA)

metric of the International Monetary Fund (IMF) is not applicable to the Hong

Kong dollar as the city's domestic economy has little relevance to the currency

flows. In fact, Hong Kong's foreign reserves are currently 46% of M2, ranking it

among the world's highest, compared with 13% in Japan and 4% in the UK. In the

event of a capital flight, the Hong Kong Monetary Authority (HKMA) will be able

to meet redemption requirements as the Exchange Fund invests primarily in

liquidity instruments; 81% of its assets are in USD, spanning different tenors.

We do not see any economic factor that will trigger massive capital flight.

Unless there is a significant deterioration of the business environment such as

rule of law or political threat, the currency peg will remain intact, in our

view."