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Hong Kong’s Exchange Fund reports US$13 billion gain in second quarter, but outlook remains uncertain
- Second-quarter earnings the best in over a year, thanks to the global stock market rally
- The second half of the year remains challenging, HKMA CEO Eddie Yue says
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Hong Kong’s Exchange Fund, the war chest to defend the local currency, made a strong comeback in the second quarter, posting returns of HK$101.4 billion (US$13.08 billion) on the back of rising stock markets, which helped it to recover almost all its losses in the first quarter.
The returns in the April to June quarter were the best since it made HK$$133.4 billion in the first quarter of 2019, helping it to offset the first quarter loss at HK$112 billion, according to a statement from the Hong Kong Monetary Authority on Friday.
The performance helped the Exchange Fund narrow its losses in the first half to HK$10.6 billion.
The HKMA’s returns were helped by stock market rallies across the world. Overseas equity investments rose HK$67.7 billion in the second quarter, compared to a heavy loss of HK$83.1 billion in the first quarter. The fund made HK$8.8 billion from Hong Kong equities, against a loss of HK$28.4 billion in the first quarter.
“The outbreak of Covid-19 caused wild swings in financial markets in the first half of the year,” said Eddie Yue Wai-man, chief executive of HKMA in a statement.
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