The Hong Kong Monetary Authority reported an income of HK$18.6 billion from Exchange Fund investments in the third quarter, despite warning of uncertainties ahead in the fourth quarter. Gains from Hong Kong stocks and foreign exchange investments were significant, at HK$9.1 billion and HK$7.7 billion respectively, while contributions from bond and other equity investments were much smaller. For the first three quarters of this year, total investment income was HK$171.9 billion. Speaking to the Legislative Council's financial affairs panel, Authority CEO Eddie Yue described the current quarter as "difficult with uncertainties," citing Middle East tensions, financial conditions in major markets, and developments in artificial intelligence as contributing factors. Yue highlighted the importance of considering the Exchange Fund's long-term returns and emphasized the Authority's strategy of maintaining a diversified allocation to enhance portfolio defensiveness.
Gains from Hong Kong stocks, foreign exchange, and other equities were substantial in the third quarter, but returns from bond investments were modest, with the overall investment income totaling HK$171.9 billion. Yue explained that the US midterm election outcomes influenced market volatility, raising concerns over potential slowdowns in AI and data-center construction. Despite these concerns, he advised investors to focus on the long-term sustainability of the Exchange Fund's returns.
Eddie Yue, CEO of the Hong Kong Monetary Authority, warned that the fourth quarter of the year would be challenging due to uncertainties ranging from global political tensions to market conditions and technological trends. He noted that while the fund's performance was robust in the third quarter, it could see fluctuations in the upcoming period. Yue also expressed confidence in the risk management strategy, which includes a diversified investment portfolio, highlighting its effectiveness in addressing potential market risks.