HK's exchange fund records 50.5b HKD investment income

Hong Kong's Exchange Fund recorded an investment income of 50.5 billion HK dollars (about 6. 52 billion U.S. dollars) in the first half of 2014, the Hong Kong Monetary Authority (HKMA) announced on Tuesday.

The HKMA published the position of the Exchange Fund at end- June 2014, showing gains on Hong Kong equities amount to 1.9 billion HK dollars, gains on other equities 19.6 billion HK dollars, gains on bonds 26.6 billion HK dollars, an exchange gain of 0.4 billion HK dollars; and gains on other investments 2.0 billion HK dollars.

Fee payments to the Fiscal Reserves amounted to 13.9 billion HK dollars in the first half of 2014. Fee payments on placements by Hong Kong government funds and other statutory bodies amounted to 4.1 billion HK dollars.

After deducting the fee payments, interest and other expenses, the Accumulated Surplus of the Exchange Fund recorded an increase of 28.9 billion HK dollars.

Total assets of the Exchange Fund stood at 3,071 billion HK dollars at the end of June 2014, an increase of 38.2 billion HK dollars compared with the end of 2013.

Commenting on the Exchange Fund results for the first half of 2014, Chief Executive of the HKMA Norman Chan said "The investment environment in the first half of this year was relatively stable. As a result, our bond and equity portfolios achieved quite remarkable results".

"Nevertheless, the investment outlook for the second half of the year is uncertain. The sustainability of the recovery in the U. S. economy remains to be seen."

He said that there are also great uncertainties in the pace of interest rate normalization in the United States after the end of the Federal Reserve's asset purchases.

In view of the complex and constantly changing investment environment, the HKMA will as always manage the Exchange Fund in a cautious and prudent manner and continue to pursue investment diversification, he added.