Hong Kong’s Exchange Fund reported its biggest interim return in more than two decades, as a bull run in the local stock market and stabilised bonds helped bolster the city’s financial war chest.
The fund’s returns were particularly strong during the three months that ended in June, growing 2.4 times to HK$115.2 billion, chalking up the second consecutive quarter of growth. The fund made a loss of HK$20.3 billion in the fourth quarter of 2024, as earnings were hobbled by a tepid stock market.
“As the US and major economies made progress in tariff negotiations, investor confidence stabilised and global equity markets rebounded,” said Eddie Yue Wai-man, chief executive of the HKMA. “Hong Kong equities also benefited from capital inflows and the Hang Seng Index rose by about 20 per cent in the first half.”
The Exchange Fund traces its roots to 1935. It provides backing to the issuance of banknotes in the city and defends the Hong Kong dollar from attacks by speculators and currency short-sellers. The HKMA, the city’s de facto central bank, invests the fund in Hong Kong equities and overseas stocks, global bonds, global real estate and other long-term projects.
