Exchange Fund posts gains of HK$49 b
Third-quarter rebound follows HK$23.2b investment loss in the previous quarter, but HKMA chief warns markets remain challenging
A stock market rally helped the Exchange Fund turn around its ledger with strong investment gains in the third quarter, but the Hong Kong Monetary Authority warned that investment conditions remained challenging.
The Exchange Fund, the reserve the HKMA uses to defend the Hong Kong dollar, reaped investment gains of HK$49 billion during the quarter, turning around from a HK$23.2 billion investment loss in the second quarter, said Norman Chan Tak-lam, chief executive of the HKMA, which administers the fund.
Chan released the figures in a quarterly briefing to legislators yesterday. He said the strong performance of stock markets worldwide during the quarter, after the United States maintained its monetary easing policy, helped the fund's performance.
The Hang Seng Index rose 10 per cent in the third quarter, compared with a drop of 8.2 per cent in the first half.
Separately, the Hong Kong Investment Funds Association (HKIFA) reported that the city's retail funds made gross sales of US$16.2 billion in the third quarter, down 19 per cent from the previous quarter. Net sales amounted to US$235.8 million, indicating significant redemptions.
Investment markets have been very volatile in the past nine months
The Exchange Fund's overseas stock portfolio doubled its year-on-year gains to HK$17.9 billion in the quarter, while the Hong Kong stock portfolio added HK$13.7 billion and the foreign exchange portfolio was up HK$15.6 billion. However, investment gains for the first nine months fell 45 per cent year on year to HK$44.9 billion.