Exchange Fund makes HK$18.6bn as tough quarter looms

The Hong Kong Monetary Authority reported a total income of HK$18.6 billion from Exchange Fund investments in the third quarter, with Chief Executive Eddie Yue cautioning about the uncertainties ahead in the fourth quarter. Investment gains from Hong Kong equities amounted to HK$9.1 billion, while bond investments contributed only HK$300 million.

Other equities and foreign exchange investments yielded HK$1.5 billion and HK$7.7 billion, respectively. The total investment income for the first three quarters of the year reached HK$171.9 billion. At a meeting of the Legislative Council’s financial affairs panel, Yue described the current quarter as "difficult with uncertainties," citing factors such as Middle East tensions, financial conditions in major markets, and developments in artificial intelligence.

He pointed out that the uncertainty surrounding the US midterm election results and potential slowdowns in AI build-out and data-center construction contributed to market volatility. Despite the challenges, Yue stressed that the Exchange Fund is a long-term investment and urged people to focus on its long-term returns rather than short-term fluctuations.

The authority has maintained a diversified asset allocation to enhance portfolio defensive measures.