HKMA Exchange Fund 1st-Half Investment Income Gained to HK$126.5 Billion

By Chester Yung Features Dow Jones Newswires

The fund that maintains the Hong Kong dollar's peg to the U.S. dollar registered an investment income of 126.5 billion Hong Kong dollars (US$16.2 billion) in the first half, up from HK$44.3 billion a year ago, as equity markets performed well, the Hong Kong Monetary Authority said Thursday.

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The HKMA's Exchange Fund gained HK$27.8 billion on Hong Kong equities and HK$40.1 billion on global equities during the six months ended June 30. It also gained HK$16.5 billion on its bond holdings for the first half, the HKMA said.

For the second quarter, the Exchange Fund posted an investment income of HK$61.6 billion, slightly lower than HK$64.9 billion in the first quarter, the city's de facto central bank added.

HKMA Chief Executive Norman Chan warned that the positive trend of the global financial markets in the first half "may not be sustainable."

He said the investment environment in the second half was still fraught with uncertainties, including the pace of U.S. interest-rate normalization, the timing of a reduction of the Federal Reserve's balance sheet, as well as Brexit negotiations.

"These uncertainties could affect market sentiments easily, leading to adjustment in the asset markets," Mr. Chan saod.

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Write to Chester Yung at chester.yung@wsj.com

(END) Dow Jones Newswires

July 27, 2017 06:25 ET (10:25 GMT)