Hong Kong Exchange Fund gains US$13 billion in first half of 2024 amid market rallies

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The war chest that defends the local currency ‘registered a decent investment income in the first half of 2024’, says monetary authority CEO

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The Exchange Fund defends Hong Kong’s currency from attacks by hedge funds and currency traders. Photo: K. Y. Cheng

Enoch Yiu

Published: 5:10pm, 30 Jul 2024Updated: 5:13pm, 30 Jul 2024

Hong Kong’s Exchange Fund, the war chest used to defend the local currency, posted an investment return of HK$104 billion (US$13 billion) in the first half of the year as stock markets rallied globally.

The result is 10 per cent lower than HK$116.4 billion gain in the same period a year ago, the Hong Kong Monetary Authority (HKMA) said on Tuesday. But it is still the fifth-best first-half return since the HKMA began announcing half-year results for the fund in 2003, and is much better than HK$165.4 billion loss in the first half of 2022.

The fund returned HK$41.7 billion in the second quarter, almost a fivefold jump compared with HK$8.4 billion a year ago. The gain is 33 per cent lower than the HK$62.3 billion the fund earned in the first quarter, according to updated data, but is the third consecutive positive quarter after a loss of HK$10.5 billion in the third quarter of 2023.

“Overall, the Exchange Fund registered a decent investment income in the first half of 2024,” said Eddie Yue Wai-man, CEO of the HKMA.

He said the expectation of an interest rate cuts improved market sentiment in Hong Kong and overseas markets.