Hong Kong Exchange Fund Q3 Investment Profit Down 57%

The Hong Kong Exchange Fund, which is used to back the local currency, posted investment income of HK $ 52.8 billion (US $ 6.81 billion) in the third quarter, a drop of 56.6 percent. cent from the previous quarter, the Hong Kong Monetary Authority (HKMA) said yesterday.

The figure compares with an investment profit of HK $ 23.5 billion a year earlier and a revised investment income of HK $ 121.6 billion in the second quarter.

For the January-September period, investment income reached HK $ 62.4 billion, compared with HK $ 201.9 billion a year earlier.

While the fund made bond gains of HK $ 83.2 billion in the first nine months, Hong Kong stocks and the exchange rate posted losses of HK $ 19.9 billion and HK $ 9.7 billion. , respectively.

“The Hong Kong financial market and the Pegged Exchange Rate System continue to operate effectively,” HKMA Chief Executive Eddie Yue (余偉文) said during a presentation at the Hong Kong Legislative Council, reiterating that the system you don’t need to change.

Yue said that the outlook for the fourth quarter is “very uncertain” and “very difficult” to predict, due to the Brexit negotiation and the COVID-19 pandemic, which would drag the world economy down in the short term, while the impact in the long run it might not be ignored.

Commenting on today’s US presidential election, Yue said the result could be contested and cause market panic, but he was confident that Hong Kong’s strong financial system is well positioned to withstand such shocks.

The territory’s de facto central bank said it would remain defensive and place liquidity as one of the most important factors under consideration to preserve capital, but urged the public to manage risks.

The HKMA is the key administrator of the Exchange Fund, which is under the control of the financial secretary and invests in stocks, bonds, currencies and other securities and assets.