HKMA exchange fund posts investment income of $110b in H1

The gains on bonds were at $58b.

The Hong Kong Monetary Authority (HKMA) said it reported an investment income of $110b in H1 2023, with $58b gains on bonds.

In a statement, HKMA revealed other components including losses on Hong Kong equities of $4.8b, gains on other equities of $48.5b negative currency translation effect of $1.8b on non-Hong Kong dollar assets, and gains on other investments of $10.1b.

Fees on placements by the Fiscal Reserves and placements by HKSAR Government funds and statutory bodies were $10.0b and $7.9b, respectively in H1 2023, with the rate of fee payment at 3.7% for 2023.

HKMA Chief Executive Eddie Yue said the reversal of the previous year’s decline in equity and bond markets contributed to the overall investment income.

But Yue disclosed that they are “not overly optimistic” about the investment outlook for the rest of the year. 

He said the possibility of “continued monetary and credit tightening in the banking sector leading to economic recession is still uncertain.”

To face these obstacles, Yue said HKMA will be flexible in overseeing the exchange fund and diversifying investments.