The HKMA announced that the first quarter investment income of the Exchange Fund was HKD 120.9 billion, the highest in a single season since records began. In the fourth quarter of last year, it recorded a loss of HKD 33.6 billion. It rose by 2.5 times year-on-year. The performance in the first quarter was mainly driven by stock investment. The investment income of Hong Kong stocks was HKD 20.8 billion, up by 11.2 times year-on-year. Other stocks also earned HKD 49.9 billion.

Bond investment income was HKD 36.7 billion, up by 5.7 times year-on-year. However, foreign exchange investment income fell by 49% to HKD 13.5 billion. Eddie Yue, Deputy Chief Executive of the HKMA, said that the market sentiment in the first quarter was good, the Fed’s monetary policy turned, the China-US trade negotiations were progressing, financial market and global stock markets rebounded sharply, including US stocks, Hong Kong stocks and the mainland stock market.

Chief Executive Norman Chan said that the stock market performance is based on the assumption that the market will reach an agreement on China-US trade war. If the two sides fail to reach an agreement, the stock market will have a strong reaction, which will affect the performance of the Exchange Fund in the second and third quarter, but emphasise that everyone should pay attention to long-term income.

Norman Chan also said that if the trade negotiations fails, it will be a lose-lose situation, and all trading partners will be affected. However, as to whether the United States will impose tariffs on Hong Kong, Norman Chan believes that there is a trade deficit between Hong Kong and the United States, so there is not much reason to impose tariffs.

As for the property market, Norman Chan said that the overheating situation still exists. Although there was a correction in last year, it has stopped falling and rebounded this year. The future trend is still unpredictable. The authorities will adjust the counter-cyclical measures in response to the property market.