The Hong Kong Monetary Authority (HKMA) announced today (28
July) the unaudited consolidated balance sheet of the Exchange Fund
as at the end of June 1999 (Annex 1). The figures, comprising the
accounts of the Exchange Fund and its subsidiary companies, show
that in the first half of 1999, total assets rose by 4.3% from
HK$921.4 billion at the end of December 1998 to HK$961.1 billion at
the end of June 1999. After deducting interest payable to the
fiscal reserves, the accumulated surplus of the Exchange Fund
increased by 10.1% from HK$242.3 billion at the end of December
1998 to HK$266.8 billion at the end of June 1999. An accompanying
Statement of Valuation of the Hong Kong Equity Portfolio was also
published (Annex 2), showing that the market value of the equity
investments of the Portfolio at the end of June amounted to
HK$216.8 billion.
In the first half of 1999, the investment income of the Exchange
Fund was boosted by the strong performance of the equity markets,
particularly in Hong Kong. The gains of the Exchange Fund from the
equity markets were partially offset by the weakness in the OECD
bond markets and by the strength of the US dollar against major
currencies.
"The investment environment for the second half of 1999 remains
difficult. As the outlook on US interest rates is uncertain,
volatility in global markets and exchange rates may stay high,"
said Mr Joseph Yam, Chief Executive of the Hong Kong Monetary
Authority. "The HKMA will continue its prudent management of the
Exchange Fund to seek a steady return in a risk-controlled manner
in accordance with the guidelines set by the Exchange Fund Advisory
Committee," he said.
The HKMA today also published figures released on a monthly
basis in the Exchange Fund Abridged Balance Sheet (Annex 3) and
Currency Board Account (Annex 4) for end-June. These figures
comprise the accounts of the Exchange Fund only and do not include
those of the subsidiary companies.
Total assets of the Exchange Fund increased by HK$25.4 billion
in the month of June, from HK$927.6 billion at end-May to HK$952.9
billion at end-June. Both foreign currency assets and Hong Kong
dollar assets increased, by HK$4.7 billion and HK$20.7 billion
respectively. The increase in Hong Kong dollar assets reflects
primarily appreciation in the market value of the Hong Kong equity
portfolio.
Meanwhile, Currency Board Account figures released today showed
that the monetary base at end-June was HK$196.5 billion, a decrease
of HK$0.8 billion, or 0.4% from end-May 1999. The decrease was
primarily due to a decline in the Aggregate Balance of HK$2.3
billion, which was partly offset by an increase in Certificates of
Indebtedness of HK$1.1 billion.
The backing assets decreased slightly from HK$216.9 billion to
HK$216.7 billion. The decline in US dollar assets backing the
Aggregate Balance was largely offset by an increase in backing
assets against Certificates of Indebtedness and net income and
revaluation gains totalling HK$875 million. As a result, the
backing ratio increased marginally from 109.95% at end-May to
110.30% at end-June.
Attachment
Annex 1 :
Exchange Fund Balance Sheet
Annex 2 :
Statement of Valuation of the Hong Kong Equity Portfolio
Annex 3 :
Abridged Balance Sheet of the Exchange Fund
Annex 4 :
Currency Board Account
Hong Kong Monetary Authority
28 July 1999
