Hong Kong Exchange Fund Q1 investment income HK$97.9 billion: HKMA

HONG Kong’s Exchange Fund, which is used to back the Hong Kong US dollar, posted investment income of HK$97.9 billion (S$16.5 billion) in the first quarter of 2023, the Hong Kong Monetary Authority (HKMA) said on Monday (May 8), gaining for a second consecutive quarter.

The figure compared with a HK$48.8 billion investment loss in the same period a year earlier and an adjusted HK$73.4 billion in investment income in the fourth quarter of 2022.

“It is still uncertain for the quarters to come and things are still changing in the environment of financial markets such as US inflation and interest rate environment,” chief executive Eddie Yue told reporters.

Yue said sentiment will depend on the global economic situation and any potential spillover of US bank problems on the wider financial system.

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.

In 2022, the exchange fund recorded an adjusted investment loss of HK$205.4 billion.

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During the first quarter, the fund’s holdings of Hong Kong equities recorded investment income of HK$3.3 billion, compared with a HK$16.3 billion gain in October-December and a HK$9.4 billion loss in the same period a year ago.

Meanwhile, the gain on other equities narrowed to HK$25.5 billion for the first quarter versus a HK$31.4 billion gain the previous quarter. The gain from bonds was HK$43.9 billion in the first three months of the year compared with a gain of HK$25.5 billion in the fourth quarter of last year. REUTERS