London Daily

Focus on the big picture.
Thursday, Sep 18, 2025

Hong Kong’s Exchange Fund reports record HK$86 billion loss in first quarter as coronavirus batters stock market

Hong Kong’s Exchange Fund reports record HK$86 billion loss in first quarter as coronavirus batters stock market

The enormous losses mainly stemmed from the fund’s investments in both Hong Kong and overseas stocks. The losses, mainly from overseas stock market investments, are in sharp contrast to a year ago when the fund reported its best first-quarter return, of HK$133.4 billion

Hong Kong’s Exchange Fund, the war chest used to defend the local currency from attacks by short sellers, lost HK$86.1 billion (US$11.1 billion) from investments in the first quarter as it fell victim to a worldwide stock market slump.

It is the biggest three-month loss the fund has suffered in the 16 years it has been reporting its quarterly performance.
The Hong Kong Monetary Authority, which is responsible for investing the reserves, predicted more uncertainty in the rest of the year.

The losses, which came mainly from overseas stock market investments, are in sharp contrast to a year ago when the fund reported its best first-quarter return, of HK$133.4 billion. It marks the first quaterly loss for the fund since the fourth quarter of 2018 when it lost HK$33.6 billion. This surpassed last record loss of HK$64.8 billion in the third quarter of 2015.



A strong return on both stocks and bonds last year had helped the Exchange Fund to report a record high gain of HK$262.2 billion, compared with only a modest increase of HK$10.9 billion in 2018 when it was hard hit by the US-China trade war. Last year’s performance surpassed the record HK$252 billion set in 2017.

The tide has turned in the first quarter, however, as global stock market plunged as a result of the Covid-19 pandemic which has infected over 3 million people worldwide including over 1,000 in Hong Kong. The health crisis has led to governments worldwide ordering travel restrictions, closing borders and halting business activities.

Hong Kong’s benchmark Hang Seng Index dropped 16 per cent in the first quarter of the year, while indices in Japan and South Korea plunged 20 per cent and the Australian market plummeted by almost a quarter. The Dow Jones Industrial Average lost 23 per cent, for its worst quarterly loss since 1987.

“The outlook for the markets remains full of uncertainties amid the coronavirus pandemic,” said Eddie Yue Wai-man, the chief executive of the HKMA at a regular quarterly meeting with lawmakers on Monday morning.

The fund recorded a loss of HK$28.4 billion on Hong Kong stock investments in the first quarter, compared with profit of HK$20.8 billion in the same period a year earlier.

It lost HK$83.1 billion from its overseas stock investments, compared with a strong return at HK$49.9 billion during the corresponding quarter in 2019.

The fund also reported a loss due to foreign-exchange valuation changes on its assets of HK$29 billion in the first quarter, compared with a gain at HK$13.5 billion a year earlier.

The losses were partly offset by a gain in its bond investments of HK$54.4 billion in the first three months, compared with HK$36.7 billion a year earlier.

The fund will pay the Hong Kong government HK$9.6 billion from its earnings for the quarter.

Stockbrokers believe the Exchange Fund returns will bounce back in the second quarter.

‘The Exchange Fund has a lot of investment in both Hong Kong and overseas stocks. These markets have bounced back in April already,” said Gordon Tsui, chairman of the Hong Kong Securities Association.

While the pandemic is not yet over, many governments have introduced interest rate cuts and other measures to boost the economy, which Tsui believes will support the investment market in the coming months.

“The worst is over. Even if the Exchange Fund maintains its current investment strategy, it still has a chance to turn around in coming months and to report a profit for the full year,” he said.

Newsletter

Related Articles

0:00
0:00
Close
Massive Strikes in France Pressure Macron and New PM on Austerity Proposals
Trump Seeks Supreme Court Permission to Remove Fed Governor Lisa Cook
Hillary Clinton’s Reckless Rhetoric Fuels Division After Charlie Kirk’s Assassination
NASDAQ Rises to Record as Intel Soars More Than 20%, Nvidia Gains 3%
Nvidia’s $5 Billion Bet on Intel Reshapes AI Hardware Landscape
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Trump’s Quip on Biden and Google Lawsuit Revives Debate Over Antitrust Legacy
Macron and his wife to provide 'scientific photographic evidence' that she is a real woman
US Tech Giants Pledge Billions to UK AI Infrastructure Following Starmer's Call
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
DeepMind and OpenAI Achieve Gold at ‘Coding Olympics’ in AI Milestone
SEC Allows Public Companies to Block Investors from Class-Action Lawsuits
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Federal Reserve Cuts Rates by Quarter Point and Signals More to Come
Effective and Impressive Generation Z Protest: Images from the Riots in Nepal
European manufacturers against ban on polluting cars: "The industry may collapse"
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Trump: Cancel quarterly company reports and settle for reporting once every six months
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
US Launches New Pilot Program to Accelerate eVTOL Air Taxi Deployment
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
×