Coronavirus will hurt the HK$1 trillion pension savings of 3 million Hongkongers as stock markets slump, warns MPF watchdog
- ‘We have very challenging investment markets worldwide this year,’ says chief of the body that regulates the city’s Mandatory Provident Fund
- He revealed the fund generated returns of 12.2 per cent last year as US stock markets soared despite trade war, Brexit
“We have very challenging investment markets worldwide this year. The Covid-19 outbreak has affected the investment market worldwide. On Monday alone, the US benchmark Dow Jones Industrial Average dropped over 1,000 points and there will be more volatility ahead,” said Cheng Yan-chee, executive director of the Mandatory Provident Fund Schemes Authority (MPFA), the pensions regulator.
Cheng issued the warning at a video conference on Tuesday when he released details of the MPF’s performance last year. The fund generated a profit of 12.2 per cent in 2019, he revealed, and has achieved an annual average return of 4.1 per cent since the launch of the retirement scheme 20 years ago.
Last year’s healthy profit was a turnaround from a loss of 9.3 per cent in 2018, but below gains of 22.3 per cent a year before that, according to the MPFA data.
Its impressive performance last year came despite some strong headwinds.
“The stock market last year has a roller coaster ride due to the trade war, Brexit and social unrest [in Hong Kong]. However, the US stock market rose 28 per cent while the Hang Seng Index gained 9 per cent. This boosted the performance of MPF last year as a whole,” said Louis Tse Ming-kwong, managing director of VC Asset Management.
