Exchange Fund Records Sharp Fall In Third Quarter

The Hong Kong Exchange Fund's investment return for the third quarter of 2019 hits HK$20.2 billion – the worst performance since the fourth quarter of last year.

The figure is also 55 percent lower than that of the second quarter of this year, but marked a significant year-on-year improvement of 113 percent.

The Monetary Authority said on Monday that the income mainly came from bond investment, which brought in nearly HK$30 billion, but the return figure was dragged by a HK$12.3 billion of loss from local stock investment.

The fund, which is used to defend Hong Kong's currency, returned HK$199 billion for the first nine months of the year – more than triple the figure recorded in the same period last year.

The Monetary Authority's chief executive Eddie Yue said whether the performance can be sustained through the year will depend on several factors including the Sino-US trade dispute and global market uncertainties.

"Going forward into the fourth quarter of this year, it's a bit difficult to see because there are many different factors in play," he said.

"For example, whether the China-US trade tensions will ease or whether the Federal Reserve is going for a pause or whether they will further reduce rates ... or whether Brexit will go as smooth as some people might think now with the latest development," Yue said.