Hong Kong's Exchange Fund has posted a remarkable gain of US$28.8 billion (approximately HK$224.7 billion) in the first nine months of 2024, marking the best performance on record for the fund. This achievement comes as the fund has experienced four consecutive quarters of gains, driven primarily by rallies in both the US and Hong Kong stock markets, alongside a diversified investment strategy. Eddie Yue Wai-man, the chief executive of the Hong Kong Monetary Authority (HKMA), expressed optimism for continued positive returns despite ongoing market uncertainties [915205c4].
The fund's performance has been significantly bolstered by a 24% rise in the Hang Seng Index during the same period, which contributed HK$28.5 billion to its overall gains. In the second quarter of 2024, the fund earned HK$114.6 billion, recovering from a loss of HK$10.5 billion in the same quarter the previous year. Additionally, bond investments yielded HK$66.4 billion in the third quarter of 2024, a substantial increase from HK$15.7 billion a year earlier [915205c4].
Key market developments have also played a critical role in this financial upswing. The US Federal Reserve's decision to cut interest rates by 50 basis points on September 18, 2024, coupled with China's announcement of stimulus measures on September 24, 2024, has significantly enhanced market performance and investor sentiment in Hong Kong. However, the fund did face some challenges, including a loss of HK$8.2 billion due to foreign-exchange depreciation on non-US dollar assets [915205c4].
The Exchange Fund, which traces its roots back to Hong Kong's Currency Ordinance of 1935, serves as a crucial financial safety net for the region, and its recent performance underscores the resilience of Hong Kong's financial markets amidst global economic fluctuations [915205c4].