Hong Kong Exchange Fund reports US$7 billion gain in first quarter thanks to rise in overseas stock investments

Name: Hong Kong stock market falls below 15,000 level, its lowest in 15 months
Uploaded: 2024-05-06T02:43:16.000Z
Duration: 5 min 39 s
Description: Hong Kong stock market falls below 15,000 level, its lowest in 15 months

War chest that defends the local currency gained HK$54.3 billion (US$7 billion) from overseas stock investments, tracking 10 per cent increase in S&P500

Local stock investments suffered a HK$2.3 billion loss as the Hang Seng Index fell 3 per cent during the quarter

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A man walks by an exchange shop decorated with banknotes in Central, Hong Kong. Photo: Felix Wong

Enoch Yiu

Published: 10:43am, 6 May 2024Updated: 1:26pm, 6 May 2024

Hong Kong’s Exchange Fund, the war chest used to defend the local currency, continued its comeback in the first quarter, posting a return of HK$54.3 billion (US$7 billion) as rising overseas stock markets offset losses in domestic equities.

That is 50 per cent lower than the HK$108 billion gain in the same quarter of 2023, and 55 per cent lower than the HK$120.1 billion returned in the previous three month-period, according to data provided by the Hong Kong Monetary Authority (HKMA) on Monday.

The lower return was because of Hong Kong stock market losses and a decrease in bond prices during the quarter as a result of elevated interest rates.

“The US interest rate cut maybe delayed as a result of high inflation,” said the de facto central bank’s chief executive, Eddie Yue Wai-man, during his quarterly meeting with lawmakers on the financial affairs panel on Monday.

“However, we have seen investment market sentiment turn more positive, and there are more fund inflows to the stock markets in both Hong Kong and the mainland.

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Hong Kong stock market falls below 15,000 level, its lowest in 15 months

“After the Hong Kong government’s efforts to arrange many events to attract visitors, we expect to see the economy grow steadily and the local financial markets remain resilient.”