Hong Kong Monetary Authority: Exchange Fund investment income for the first half of the year was HK$134.7 billion, with total assets of HK$4463.6 billion

The Zhitong Finance App learned that on July 28, the Hong Kong Monetary Authority announced the unaudited financial status of the Exchange Fund as of the end of June 2026. According to the data, in the first half of 2026, the Exchange Fund recorded an investment income of HK$134.7 billion. Among them, income from bond investment was HK$49.1 billion; loss from investment in Hong Kong stocks was HK$11.8 billion; income from investment in other stocks was increased by HK$53.7 billion; foreign exchange valuation of non-Hong Kong dollar assets was increased by HK$34.3 billion; and income from other investments was HK$9.4 billion.

As of the end of June 2026, the total assets of the Exchange Fund were HK$4,463.6 billion, an increase of HK$302.4 billion over the end of 2025, while its cumulative surplus was HK$862.7 billion.

Interest rates paid by the Exchange Fund to financial reserve deposits and deposits of the Hong Kong Special Administrative Region Government funds and statutory organizations in 2026 were 4.8%. The related expenses for the first half of the year were HK$10.9 billion and HK$5.8 billion respectively.

Yu Weiwen, Chief Executive of the Hong Kong Monetary Authority, said that although geopolitical tension in the Middle East caused significant market fluctuations in March, the market atmosphere improved markedly in the second quarter as the situation stabilized thereafter. In summary, the overall performance of the global financial market improved in the first half of 2026. Among them, driven by investment demand related to artificial intelligence, the semiconductor and technology hardware sector performed particularly well, and the US stock market and some major markets in the Asia-Pacific region reached new highs. On the bond market side, due to the sharp rise in international oil prices and supply chain disruptions, the market is worried that US inflation will rise, and the US Treasury yield curve generally moved upward in the first half of the year.

In this market environment, the Exchange Fund recorded an investment income of HK$134.7 billion in the first half of 2026. Although Hong Kong stock investment recorded losses due to the overall decline in the stock market, other stock investments performed well, and overall stock investment still recorded impressive returns. In terms of bond investment, the yield on US dollar bonds remained high, continuing to bring steady interest income to the bond portfolio. Furthermore, due to exchange rate changes, the Exchange Fund's non-Hong Kong dollar assets recorded an increase in foreign exchange valuations.

Looking ahead to the second half of the year, the global investment market is facing many uncertainties, he added. Asset prices related to the development of artificial intelligence have risen significantly, and some market participants are beginning to pay attention to whether related asset prices will be drastically adjusted and affect the overall market. In terms of monetary policy, the direction of the Federal Reserve's policy still depends on uncertainties such as local inflation trends and job market conditions; however, the Federal Reserve has recently reduced the provision of forward-looking guidance, and the market may become more sensitive to the release of different data, which may increase financial market fluctuations. If the geopolitical situation heats up again and disrupts global supply chains and energy prices, it may also increase market concerns about the outlook for inflation and interest rates. Furthermore, exchange rate trends have changed frequently, and the investment benefits brought about by the relevant valuation increases in the first half of 2026 may not continue in the second half of the year.