The Hong Kong Monetary Authority (HKMA) today announced the audited results of the Exchange Fund at end-1996 with total assets of the Fund up 16% to HK$534.5 bn (1995: HK$460.7 bn) and a 7.9% growth in accumulated earnings. Accumulated earnings in the Exchange Fund increased from HK$160.1 bn as at end-1995 to HK$172.8 bn at the end of last year, an increase of HK$12.7 bn.
"The HK$12.7 bn increase in accumulated earnings reflected the result of HKMA's prudent management of the Fund at times of volatile bond markets and a strong US dollar. The investment in US equities also contributed to the earnings as that market rallied strongly in 1996," said an HKMA spokesman.
"The outlook for 1997 remains uncertain. Market consensus that US interest rates may increase in 1997, coupled with the strength in the US dollar will impact on the Fund's performance in 1997."
"The HKMA will maintain its prudent policy and continue to invest the majority of the Fund's assets in fixed income instruments," the HKMA spokesman added.
The HKMA also announced today the foreign currency assets (i.e. foreign reserves) within the Exchange Fund totalled US$63.8 bn as at end of February 1997. This represented a drop from the US$65.9 bn figure as at end-January due to seasonal factors.
| Exchange Fund Balance Sheet |
| as at 31 December 1996 |
|
1996 |
1995 |
|
HK$ MILLION |
HK$ MILLION |
| ASSETS |
| Cash and short-term funds |
126,648 |
100,343 |
| Fixed deposits |
63,401 |
76,830 |
| Certificates of deposit |
64,065 |
23,657 |
| Investments |
270,869 |
250,702 |
| Fixed assets |
166 |
58 |
| Other assets |
9,368 |
9,144 |
| Total Assets |
534,517 |
460,734 |
| Total Assets (by allocation): |
|
|
| Foreign currency assets |
493,802 |
428,547 |
| Hong Kong dollar assets |
40,715 |
32,187 |
|
534,517 |
460,734 |
| LIABILITIES |
| Certificates of Indebtedness |
82,480 |
77,600 |
| Coins in circulation |
4,164 |
3,597 |
| Balance of banking system |
474 |
1,762 |
| Exchange Fund Bills and Notes |
83,509 |
53,125 |
| Fiscal Reserves Account |
145,898 |
125,916 |
| Placements by other institutions |
39,125 |
34,302 |
| Other liabilities |
6,005 |
4,298 |
| Total Liabilities |
361,655 |
300,600 |
| NET ASSETS |
172,862 |
160,134 |
|
|
|
| REPRESENTING ACCUMULATED SURPLUS |
172,862 |
160,134 |
| Exchange Fund Income and Expenditure Account |
| for the year ended 31 December 1996 |
|
1996 |
1995 |
|
HK$ MILLION |
HK$ MILLION |
| INCOME |
| Investment income |
25,384 |
46,734 |
| Licence fees |
173 |
176 |
| Others |
23 |
104 |
| TOTAL INCOME |
25,580 |
47,014 |
| EXPENDITURE |
| Note and coin expenses |
165 |
352 |
| Operating expenses |
518 |
440 |
| Interest |
12,169 |
11,862 |
| TOTAL EXPENDITURE |
12,852 |
12,654 |
| SURPLUS FOR THE YEAR |
12,728 |
34,360 |
|
|
|
| STATEMENT OF ACCUMULATED |
|
|
| SURPLUS |
|
|
| Accumulated surplus brought forward |
160,134 |
125,774 |
| Surplus for the year |
12,728 |
34,360 |
|
| ACCUMULATED SURPLUS |
| CARRIED FORWARD |
172,862 |
160,134 |
Hong Kong Monetary Authority
27 March 1997
