Exchange Fund rises on equities

Equities boost the Exchange Fund to $43.8 billion in the first quarter this year.

Monetary Authority Chief Executive Norman Chan said the gain was achieved despite the worsening Eurozone debt crisis.

The main components of the investment income were a total return from a valuation gain net of dividends on Hong Kong equities amounting to $13.6 billion; a valuation gain net of dividends on other equities amounting to $28.2 billion; an exchange valuation gain of $4.1billion; a valuation gain on other investments amounting to $800 million and a loss from bonds of $2.9 billion.

Net investment income stood at $42.9 billion after deducting interest and other expenses.

Chan warned the escalating crisis in Europe and the lack of growth momentum in mainland China and the U.S. pose risks on global financial markets.

On the Hong Kong property market, Chan said he cannot predict whether prices will rise or decline. He noted, however, that the authority will monitor the market closely and introduce appropriate measures to maintain banking stability when necessary.