The Exchange Fund, Hong Kong’s financial war chest for defending the currency peg, reported a loss for the fourth quarter because of falling bond prices and a valuation loss on non-US dollar assets.
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For the full year, the fund reported its fifth-best annual return, as a diversified investment approach paid off. The investment return in 2024 fell 3 per cent year on year to HK$219 billion (US$28 billion), the Hong Kong Monetary Authority (HKMA) said on Monday.
The Exchange Fund reported its best-ever results for the first nine months of 2024, but that was offset by a loss of HK$20.1 billion in the fourth quarter, ending four consecutive profitable quarters. In the October to December period, Hong Kong equities lost HK$6.7 billion, while foreign exchange valuation loss reached HK$27.4 billion, offsetting a gain of HK$11.3 billion in bonds and HK$2.7 billion in overseas equities.
The weak performance of the stock markets in the fourth quarter and falling bond prices affected the performance of the Exchange Fund, Eddie Yue Wai-man, CEO of HKMA, said at a media briefing. A stronger US dollar also affected the fund’s returns, he added.
The Exchange Fund’s total assets increased by HK$65.9 billion to HK$4.082 trillion at the end of last year.
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