Hong Kong Exchange Fund’s investment income back to black in H1, outlook uncertain
HONG Kong’s Exchange Fund, which backs the Hong Kong dollar, reported an investment income of HK$110.0 billion (S$18.69 billion) in the first half of 2023, the Hong Kong Monetary Authority (HKMA) said on Tuesday (Jul 25).
The figure compared with a HK$165.4 billion investment loss in the first six months of 2022. The fund posted an investment income of HK$108 billion in the first quarter of 2023 and HK$2 billion in the second quarter.
The growth this year was thanks to a rebound in the foreign equity and bond markets but the fund’s chief executive said he was not overly optimistic about the rest of the year.
In the January-June period, bond investments recorded a profit of HK$58.0 billion, compared with a loss of HK$55.9 billion last year.
Hong Kong equity investment recorded a narrower loss of HK$4.8 billion in the first six-month from HK$8.5 billion loss year earlier, while overseas equity investment yielded profits of HK$48.5 billion, versus losses of HK$73.2 billion in the year ago period.
However, Eddie Yue, chief executive of the HKMA, said that along with geopolitical instability and tension among major economies, the possibility of monetary and credit tightening in the banking sector leading to economic recession meant uncertainty.
“Looking ahead, we are not overly optimistic about the investment outlook for the rest of the year,” Yue said.
“We will continue to strengthen the Exchange Fund’s ability to withstand market fluctuations through defensive measures,” Yue said.
The HKMA is the key manager of the Exchange Fund, which is under the control of the financial secretary and invests in equities, bonds, foreign exchange and other securities and assets. REUTERS
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