HKMA Experiences HK$104 Billion Funding Source of revenue for Alternate Treasure at Mid-2024

The Hong Kong Financial Authority (HKMA) has printed the unaudited monetary place of the Alternate Treasure as of the top of June 2024, revealing an funding source of revenue of HK$104 billion for the primary part of the presen, in line with HKMA.

Funding Positive factors and Losses

The Alternate Treasure’s funding source of revenue was once pushed through a number of parts:

• Positive factors on bonds amounting to HK$57.9 billion;
• Positive factors on Hong Kong equities totaling HK$6.6 billion;
• Positive factors on alternative equities attaining HK$47.8 billion;
• A unfavourable forex translation impact of HK$16.3 billion on non-Hong Kong buck belongings;
• Positive factors on alternative investments of HK$8.0 billion.

Charges on placements through the Fiscal Reserves and placements through HKSAR Executive budget and statutory our bodies have been HK$7.0 billion and HK$8.4 billion respectively, with a price cost charge of three.7% for 2024.

General Property and Surplus

On the finish of June 2024, the overall belongings of the Alternate Treasure stood at HK$3,978.6 billion, marking a scale down of HK$37.9 billion from the top of 2023. The amassed surplus was once HK$688.3 billion.

Marketplace Efficiency and Outlook

Eminent Govt of the HKMA, Mr. Eddie Yue, commented at the efficiency, pointing out, “In the first half of this year, most major equity markets recorded significant gains. Market optimism about interest rate cuts due to moderating inflationary pressures in major economies has driven major equity indices to new highs. The Hong Kong equity market also posted modest gains. Despite falling bond prices from rising yields of major government bonds, bond holdings recorded positive returns after accounting for interest income.”

Having a look forward, Mr. Yue highlighted a number of uncertainties that would affect the funding state, together with time coverage charge paths, world expansion outlook, and geopolitical tensions. He famous, “While the market generally anticipates that the US rate cut cycle will begin in 2024, recent economic data have been mixed; the timing and pace of the Fed’s rate cuts remain unclear. As global equity markets and asset valuations have registered substantial gains in recent years, any slowdown in the global economy or deterioration in corporate earnings could trigger heightened market volatility and adjustments in asset prices. Furthermore, it is difficult to predict the impact of geopolitical tensions, including the ongoing Russia-Ukraine conflict and the situation in the Middle East, as well as the upcoming US presidential election on the global economy and financial markets. These factors could lead to sudden reversals in market conditions.”

Date Technique

According to those demanding situations, the HKMA will proceed to prioritize capital preservation occasion aiming for long-term expansion. Mr. Yue affirmed, “We shall continue to manage the Exchange Fund with prudence and flexibility, implement appropriate defensive measures, and maintain a high degree of liquidity. We will also continue our investment diversification to strive for higher long-term investment returns, ensuring that the Exchange Fund will continue to serve its purpose of maintaining monetary and financial stability of Hong Kong effectively.”

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