Exchange Fund gains $102.7b in H1

Its total assets stood at $4.5t as of end-June.

The Exchange Fund recorded an investment income worth $102.7b in the first half of the year, the Hong Kong Monetary Authority (HKMA) reported.

Of this, $12.5b were gains on Hong Kong equities, $46.4b on other equities, $1.3b on bonds and $39.7b on other investments.

Some $2.8b was also gained from the positive currency translation effect on non-Hong Kong dollar assets.

“Driven by the continued implementation of loose monetary policies and fiscal measures as well as rising vaccination rates, the global economy started to recover gradually in the first half of 2021,” HKMA Chief Executive Eddie Yue said.

“Major equity markets have extended the upward momentum since the fourth quarter of last year.”

Total assets of the Exchange Fund stood at $4.56t as of end-June, reflecting a $67.4b increase from 2020.

The accumulated surplus, meanwhile, amounted to $834.6b over the same period.

“Looking ahead, the investment environment in the second half of the year remains highly uncertain. With the pandemic in major economies gradually brought under control, the market expects that the US Fed may consider commencing the tapering of asset purchases,” he also said.

“Meanwhile, the market is also concerned whether the rise in inflation is transitory. In case inflationary pressure kicks in and triggers a sharp rise in bond yields, there will be volatility in the financial markets.”