This undated photo shows the building of the Hong Kong Monetary Authority. (PHOTO / IC)
Hong Kong’s Exchange Fund, the war chest used to defend the local currency, recorded an investment return of HK$110 billion ($14.08 billion) in the first half of the year, as the global stock and bond markets improved.
The result was a turnaround from its loss of HK$165.4 billion recorded in the same period a year earlier, according to data released on Tuesday by the Hong Kong Monetary Authority.
Bond investments posted a HK$58 billion gain, while the return from stock investments stood at HK$ 43.7 billion
Bond investments posted a HK$58 billion gain, while the return from stock investments stood at HK$ 43.7 billion.
READ MORE: Hong Kong's Exchange Fund posts H1 loss of HK$10.6b
“Investor sentiment has turned positive as the market generally anticipated a slower pace of US rate hikes, coupled with economic data indicating resilience in the US economy,” Eddie Yue, chief executive of the HKMA, said.
He said he is “not overly optimistic” about the investment outlook for the rest of the year as the possibility of continued monetary and credit tightening in the banking sector, rate hikes by major central banks, and geopolitical instability could “ trigger asset market corrections and volatilities at any time”.
“In face of these challenges, the HKMA will remain prudent and flexible in its management of the Exchange Fund. We will continue to strengthen the Exchange Fund’s ability to withstand market fluctuations through defensive measures,” he said.
READ MORE: HK Exchange Fund posts the second-highest annual return
“Moreover, we will continue to diversify investments to strive for more stable returns for the Exchange Fund and to achieve its long-term investment objectives.”
Total assets of the Exchange Fund stood at HK$3.98 trillion at the end of June, a decline of HK$24.1 billion since the end of 2022.
Its accumulated surplus stood at HK$606.2 billion as of the end of last month.
Contact the writer at sally@chinadailyhk.com
