The Exchange Fund’s investment income in the previous quarter was 97% per annum.
The global stock exchange bond market fluctuated drastically. In the third quarter, the exchange fund investment ability was still intact. The bond and overseas stock income were 9.7 billion yuan and 12.8 billion yuan respectively, offsetting the loss of foreign exchange valuation of 16.2 billion yuan and the loss of 4.7 billion Hong Kong stocks. Yuan, the quarterly exchange fund investment income of 1.6 billion yuan, although compared with the same period of 2017, 61.8 billion yuan, down 97% year-on-year, but the income of the first quarter of 100 million yuan improved; the first three quarters of investment income was 36.7 billion yuan. Hong Kong stock investment has been eroded for two quarters, with a loss of 5.1 billion yuan in the second quarter.
Chen Delin, president of the HKMA, said yesterday that there was no winner in the Sino-US trade war. Uncertain factors have plagued the stock market, and it is difficult to predict the development of the market.
The Exchange Fund is mainly used to support the monetary and financial system. 90% of the assets held are in US dollars and Hong Kong dollars. In the third quarter, the strong US dollar recorded exchange losses on non-dollar-denominated assets, eroding 16.2 billion yuan, a loss of 21.3 billion yuan from the second quarter. Narrowed, but still the biggest loss item, the fourth season is still ugly. Ye Zeheng, senior foreign exchange market strategist at Bank of East Asia (00023), believes that Europe’s economic growth prospects are not as good as expected. The ECB’s interest rate hike schedule may be postponed, while US employment data remains stable, and the Fed’s interest rate hike continues. Time has a strong chance of a strong dollar, or the exchange performance of non-dollar-denominated assets of the Exchange Fund.
Research and development of code base infrastructure projects
In recent years, the HKMA has introduced a long-term growth portfolio, mainly investing in private equity and infrastructure projects to diversify the cyclical impact of the traditional asset market. The total investment at the end of 2017 was 235.6 billion yuan, accounting for 5.9% of the total investment of the Exchange Fund. Vice President Yu Weiwen Yesterday, although the relevant internal investment rate has been about 13.3%, the private equity investment has also fluctuated in recent years. Therefore, it is hoped to invest in more infrastructure projects to provide long-term stable returns, investment in infrastructure projects and commitments. The total amount of unspent investment is only 2.2 billion U.S. dollars, and there is much room for development in the future.
Some Legislative Council Members are worried that investing in infrastructure projects will allow the HKMA to carry out political tasks and ignore the risk of buying “One Belt, One Road” assets. Chen Delin stressed that the Exchange Fund has always been based on professional investment and will study commercial feasibility and return potential. Only when the project is invested, the location is not limited to the “Belt and Road”, so there is no political mission. Yu Weiwen added that many infrastructure investments will be managed by professional fund managers without the need to consult the HKMA.