Editorial | Bull market helping Exchange Fund contribute to city’s recovery
The HKMA and government working together is a fine example of how fiscal and monetary policy collaboration can benefit the public
Its first-half earnings jumped by 76.6 per cent to HK$194 billion (US$24.7 billion), surpassing the 2019 record of HK$178.4 billion. The 8 per cent annual increase took the fund’s total assets to HK$4.297 trillion at the end of June.
It certainly helped that the Hang Seng Index rose by about 20 per cent during that period, making it one of the world’s best performers, although the fund earned less from foreign stocks. In bonds, the fund booked returns of HK$75.3 billion, compared with HK$57.9 billion from the same period in the previous year.
A fall in the US dollar also meant significant gains in foreign-exchange appreciation from the fund’s holdings of non-US dollar assets. That translated into a HK$56.8 billion gain, against a loss of HK$16.3 billion a year ago.
While the fund is operated independently by the Hong Kong Monetary Authority (HKMA), government officials are no doubt looking forward to a contribution from the returns.
The fund is expected to pay HK$8.5 billion in the first half into the government’s fiscal reserves, a jump from HK$7 billion at the same time last year.