Date
23 September 2017
US interest rate uncertainty may continue to weigh on the Hong Kong Exchange Fund's performance in the current quarter, says HKMA chief Norman Chan. Photo: Bloomberg
US interest rate uncertainty may continue to weigh on the Hong Kong Exchange Fund's performance in the current quarter, says HKMA chief Norman Chan. Photo: Bloomberg

Exchange Fund posts HK$18.7 bln loss in third quarter

The Hong Kong Exchange Fund posted a HK$18.7 billion loss in the third quarter due to poor showing on foreign exchange investments, the Hong Kong Economic Journal reported Tuesday.

It marks the second such loss since the second quarter last year, the report noted.

The fund’s overall investment income, however, stood at HK$37.7 billion for the first three quarters following a buoyant performance in the first half to June.

The investment market is likely to remain volatile in the fourth quarter, weighing on the performance of the fund this quarter, as it is still uncertain when the US will start to raise its key interest rate, Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority, was quoted as saying.

The loss in foreign exchange investment of the fund has expanded to HK$28.4 billion in the third quarter from HK$700 million in the second quarter.

The loss was largely the result of depreciation in non-US currencies, in particular the euro, Japanese yen and the British pound. The fund’s Hong Kong equity holdings made a loss of HK$200 million.

Income from other equity investment and bonds plunged 82.5 percent and 47 percent quarter on quarter respectively, to HK$2.8 billion and HK$7.1 billion.

The fund distributed HK$6.7 billion income to the government for the third quarter, bringing the total for the first nine months to HK$20.6 billion.

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VW/JP/RC

Freelance journalist

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