HKMA Exchange Fund posts $13.3bn gain in first half amid global rally
Hong Kong Monetary Authority’s Exchange Fund recorded an investment return of HK$104 billion ($13.3 billion) in the first half of 2024, helped by a global market rally, the de facto central bank announced.
However, the fund’s total assets fell to HK$3.98 trillion ($509.5 billion) as of end-June, decreasing by HK$37.9 billion from the end of 2023.
No reason was given for the slide in assets.
In the first six months, its global bonds portfolio was the star performer, gaining HK$57.9 billion. The global equities portoflio also pocketed a HK$47.8 billion gain amid the market rally.
“In bond markets, despite falling bond prices resulting from rising yields of major government bonds, bond holdings recorded positive returns after interest income was taken into account, as bond yields stayed at a relatively high level,” said Eddie Yue, chief executive of the HKMA.
“Overall speaking, the Exchange Fund registered a decent investment income in the first half of 2024,” Yue said in a statement.
The Hong Kong equities portfolio reversed previous losses, contributing a HK$6.6 billion gain.
Looking ahead, Yue sounded a warning note about the global market outlook.
“It is difficult to predict the impact of geopolitical tensions, including the ongoing Russia-Ukraine conflict and situation in the Middle East, as well as the upcoming US presidential election on the global economy and financial markets,” he stressed.
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He said the HKMA will continue to adhere to the principle of capital preservation first while maintaining long-term growth.
The Exchange Fund is primarily used to regulate the exchange value of the Hong Kong dollar and defend its peg with the US dollar under the linked exchange rate system.