Exchange Fund Return Dips To HK$26bn In Q1

The government's Exchange Fund has seen a sharp drop in its investment return, dragged down by the poor performance of global equity markets.

First-quarter return came in at HK$26.1 billion, down 60 percent on the same period a year ago and also on the previous quarter.

The Hong Kong Monetary Authority, which manages the fund, said the major reason for the dip was related to market volatility.

The authority had notched up a record-breaking investment return of HK$252 billion last year.

The authority's chief, Norman Chan, said it is hard to compare the latest performance with 2017, when there was a bullish run in most global markets.

"We are facing uncertainty in the financial market. First of all, the valuation has been rather high already. Secondly, the US interest rates are rising, and they may rise faster than the market expects. And we are seeing intensifying trade conflict, especially between the United States and China," Chan said.

He added that he hopes a compromise can be reached between Beijing and Washington over the trade conflict during a second round of high-level talks scheduled for this week.