The Hong Kong Exchange Fund turned around in October from the HK$36.8 billion in losses it made during the first three quarters of the year, the Hong Kong Economic Journal reported Friday.
The report cited Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority, who wrote in his blog that the fund basically turned around at the end of the month.
He said the manager of the sovereign fund, which fuels the HKMA’s efforts to maintain the peg between the Hong Kong dollar and the US dollar, has adopted defensive measures to minimize the fund’s losses.
The fund has reduced its investment in long-term bonds and increased its holding of cash over the past two years to prepare for the potential impact on bond investments of an interest rate hike, Chan wrote.
It has also sped up the diversification of its portfolio, with new investment projects approved surging to about US$9 billion in the first 10 months of this year from US$5 billion in the same period last year.
Market observers said the reversal in the fund’s performance is likely due to a rebound in the stock markets last month.
The MSCI Global Stock Index rose 7.83 percent month on month in October, while the S&P 500 Index jumped 8.3 percent.
The CSI 300 Index leapt 10.34 percent, and the Hang Seng Index jumped 8.6 percent.
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