Exchange Fund yields $74bln in third quarter

Yet the Monetary Authority expects a lower income from the bonds market in the fourth quarter.

Hong Kong's Exchange Fund investment yielded $74.1 billion in income in the third quarter, its best performance in a decade, Monetary Authority Chief Executive Norman Chan announced on Monday. The figure offset the $12.1 billion loss in the previous quarter.

For the first nine months of the year, the Exchange Fund's investment recorded an income of $73.1 billion, with bonds contributed at $60.7 billion, a significant comeback compared with the $600 million loss for all of last year.

Equities contributed $15.2 billion, while a $3.6 billion loss was recorded from foreign exchange. Last year investment in equities yielded a total income of $97.7 billion while foreign exchange recorded income of $9.8 billion, according to a govrnment report.

Mr Chan told the media after a meeting of the Legislative Council Panel on Financial Affairs on Monday there are unknown factors affecting the investment performance in the fourth quarter and he expects a lower income from the bonds market. He said the risk of a property bubble is rising due to the extremely low interest rate, abundant liquidity and the improving economy. He urged the public to stay vigilant and avoid excess borrowing.

He said the authority will monitor the market and introduce measures to stabilise the banking system if necessary.