HONG KONG: Thousands of investors in US bank Morgan Stanley's high-yielding "smart bonds" products plan to ask the government to press local banks to compensate them for losses they might have incurred from their investments.

Peter Chan, a spokesman for investors in different types of structured financial products, Friday said members of the group plan to stage a large rally on July 1 to force authorities to take action relating to their soured investments.

Meanwhile, a Securities and Futures Commission spokesman Friday night said it has contacted Morgan Stanley and asked the company to release more information on their "smart bonds" issue. The regulator's spokesman issued the statement in response to media inquiries.

Bank of China (Hong Kong) and Bank of East Asia are among more than 10 local banks which offered for sale to the Hong Kong investing public the Morgan Stanley high-yielding "smart bonds", according to Morgan Stanley's prospectus on its "smart bonds" posted on its website.

"We will demand for 100 percent compensation for whatever losses that we incurred in our investments in structured (financial) products whether it is the government or the distributing banks that will give this payout," Chan said.

China Daily sought information from Morgan Stanley relating to the total amount of "smart bonds" which they have sold in Hong Kong through local distributors, but no one from the US investment bank responded to the inquiry.

(HK Edition 05/30/2009 page1)