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Housing Authority's investments suffer

Fox Yi Hu

The Housing Authority has had difficulty meeting its 6 per cent investment return target for the current financial year, its finance committee chairman says.

Stanley Wong Yuen-fai said yesterday the authority's equity investment might suffer losses in the global financial crisis. He said the authority had invested 20 to 25 per cent of its HK$60 billion reserve in stock markets. Some 45 per cent of the reserve was in global debentures.

The authority's stock investment lost HK$2 billion in the 2007-08 financial year. Overall, its investments gained 1.9 per cent, a drop of more than 4 percentage points from 2006-07. But Mr Wong said the authority was financially sound and its building and maintenance plans were unaffected. Its investment losses, if any, would not lead to higher rents for public housing tenants.

In January the authority said it hoped its investment income would stave off a projected operating deficit in two years, after it sold all its surplus Home Ownership Scheme flats.

Mr Wong said at the time that the authority's finances would be sustainable due to income from its investment fund, which was expected to yield a 6 per cent annual return.

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