Date
23 November 2017
Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority, says the investment outlook for the second half is uncertain. Photo: HKEJ
Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority, says the investment outlook for the second half is uncertain. Photo: HKEJ

Exchange Fund posts HK$50.5 billion income in first half

Hong Kong’s Exchange Fund has reported an investment income of HK$50.5 billion (US$6.52 billion) for the first half of this year, compared with a loss of HK$4.2 billion a year ago.

Investment income in the second quarter amounted to HK$37.4 billion, up 1.85 times from the previous three months, the Hong Kong Economic Journal reported on Wednesday.

Gains on Hong Kong equities reached HK$8.7 billion, while income from other equities was HK$16 billion and that from bonds was HK$13.4 billion.

Given the recent rally in the stock market, analysts said the fund is likely to report even better results in the third quarter.

Despite the analysts’ upbeat forecast, Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority, said the investment outlook for the second half is uncertain.

The sustainability of the economic recovery in the United States remains to be seen, Chan said, adding that there are also great uncertainties in the pace of interest rate normalization in the US after the Federal Reserve ends its asset purchases.

In view of the complex and constantly changing investment environment, the de facto central bank will manage the fund in a cautious and prudent manner, while continuously pursuing investment diversification, Chan said.

The fund has to pay to the government fiscal reserves HK$13.9 billion in the first half. Fee payments on placements by government funds and other statutory bodies amounted to HK$4.1 billion.

After deducting the fee payments, interest and other expenses, the accumulated surplus of the fund stood at HK$666.4 billion at the end of June while total assets of the fund amounted to HK$3.07 trillion.

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VW/AC/CG

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