Hong Kong residents’ nest eggs shrink by HK$56,500 each as Mandatory Provident Fund posts record HK$258.9 billion nine-month loss

Name: Can Hong Kong's elderly afford quality lifetime rental flats?
Uploaded: 2022-10-06T02:43:42.000Z
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The MPF on average lost 21.5 per cent in the first nine months, the worst performance since it launched 22 years ago

Analysts are optimistic about the outlook as they believe the market may rebound in the fourth quarter

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Analysts expect Hong Kong’s compulsory retirement to bounce back in the fourth quarter. Photo: K. Y. Cheng

Enoch Yiu

Published: 10:43am, 6 Oct 2022Updated: 8:25pm, 6 Oct 2022

The Mandatory Provident Fund (MPF) reported a loss of HK$258.9 billion (US$32.98 billion) in the first nine months of the year, its worst performance for the period on record, as soaring global inflation and interest rates rattled markets.

That equates to a loss of HK$56,500 on average per person.

Analysts expect Hong Kong’s compulsory retirement scheme, which covers 4.6 million employees in Hong Kong, to bounce back in the fourth quarter, however.

The loss caused the value of assets of the scheme to drop below HK$1 trillion for the first time in two years, to HK$965 billion, according to data provided by MPF Ratings, an independent pension research firm. That compares with HK$1.2 trillion at the end of 2021.

Overall the fund lost 21.5 per cent between January and the end of September, its worst nine-month performance since the launch of the MPF in December 2000. It can however still beat the Hang Seng Index, which fell 26 per cent in the same period.

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Can Hong Kong's elderly afford quality lifetime rental flats?

“Global inflation, interest rates and recession concerns continue to be the biggest market risks fuelling the current volatility,” said MPF Ratings’ chairman, Francis Chung.