HK Exchange Fund investment pays off
Source: Xinhua |
January 29, 2010, Friday
|
Print Edition
Print Edition
HONG Kong's Exchange Fund recorded an investment income of HK$106.7 billion (US$13.7 billion) in 2009, the second highest on record, the Hong Kong Monetary Authority announced yesterday.
The total assets of the Exchange Fund increased by HK$591.4 billion to HK$2.2 trillion at the end of 2009 from a year earlier, mainly due to capital inflows to the Hong Kong dollar, the HKMA said.
The full-year investment return was 5.9 percent, it said.
The investment income comprises HK$48.9 billion of gain in Hong Kong equities, and HK$48.7 billion from other equities, among others.
There was also an exchange valuation gain of HK$9.8 billion, thanks to the appreciation of other currencies against the Hong Kong dollar, which was partly offset by a valuation loss of HK$700 million on bonds and other investments.
The net investment income, after deducting interest and other expenses, was HK$103.2 billion.
The average investment returns of the Exchange Fund was, respectively, 3.8 percent over the last three years, 5 percent over the past decade and 6.1 percent since 1994.
Norman Chan, chief executive of the HKMA, said the investment environment last year was extremely uncertain and volatile, with the major equity markets under pressure in the first quarter but starting to recover from the second.
"US bond yields saw a sharp rise during the year, especially at the long end, with concerns over the supply of US government bonds and uncertainties about the timing and pace of the exit from monetary easing," he added.
"I expect the uncertainties surrounding the movements of interest rates, international fund flows and exchange rates may lead to considerable volatility in global asset markets in 2010," he said.
The total assets of the Exchange Fund increased by HK$591.4 billion to HK$2.2 trillion at the end of 2009 from a year earlier, mainly due to capital inflows to the Hong Kong dollar, the HKMA said.
The full-year investment return was 5.9 percent, it said.
The investment income comprises HK$48.9 billion of gain in Hong Kong equities, and HK$48.7 billion from other equities, among others.
There was also an exchange valuation gain of HK$9.8 billion, thanks to the appreciation of other currencies against the Hong Kong dollar, which was partly offset by a valuation loss of HK$700 million on bonds and other investments.
The net investment income, after deducting interest and other expenses, was HK$103.2 billion.
The average investment returns of the Exchange Fund was, respectively, 3.8 percent over the last three years, 5 percent over the past decade and 6.1 percent since 1994.
Norman Chan, chief executive of the HKMA, said the investment environment last year was extremely uncertain and volatile, with the major equity markets under pressure in the first quarter but starting to recover from the second.
"US bond yields saw a sharp rise during the year, especially at the long end, with concerns over the supply of US government bonds and uncertainties about the timing and pace of the exit from monetary easing," he added.
"I expect the uncertainties surrounding the movements of interest rates, international fund flows and exchange rates may lead to considerable volatility in global asset markets in 2010," he said.
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