Exchange Fund Consolidated Balance Sheet as at end-June 2000 Published
The Hong Kong Monetary Authority (HKMA) published today (31 July 2000) the unaudited consolidated balance sheet of the Exchange Fund as at the end of June 2000 (Annex 1). The figures therein show that in the first half of 2000 the Accumulated Surplus of the Exchange Fund decreased by HK$5.4 billion, from HK$291.3 billion at the end of December 1999 to HK$285.9 billion at the end of June 2000. The decrease in the Accumulated Surplus was caused by the significant fall in the prices of the Hong Kong stocks held by the Exchange Fund during the period. There was an evaluation loss of HK$24 billion in the Exchange Fund's equity portfolio, which more than offset the investments gains in bonds and other financial instruments held by the Fund.
During the first half of this year, total assets of the Exchange Fund decreased by HK$48.0 billion from HK$1,014.4 billion to HK$966.4 billion. The main reasons for this decrease are:
(a) the HK$22.1 billion redemption of bank notes issued at the end of last year to cope with seasonal and Y2K related demand. A net amount of HK$22.1 billion was withdrawn from circulation in the first half of 2000;
(b) a fall of HK$16.1 billion in "Placements by other institutions". "Placements by other institutions" include placements from other statutory bodies and bank borrowings. Hong Kong dollar proceeds from the disposal of Hong Kong equities through the TraHK Tap Facility have been used to reduce bank borrowings;
(c) unwinding of Y2K contingency liquidity held by banks with the HKMA. The Aggregate Balance in the clearing accounts of banks held with the HKMA fell by HK$6.6 billion; and
(d) the HK$5.4 billion reduction in accumulated surplus due to the evaluation loss on Hong Kong equities.
"Concerns in developed economies, particularly the US, over inflation have led to very high volatility in international financial markets, including the Hong Kong equity market, and the performance of the Exchange Fund in the first half of 2000 has been adversely affected by the net fall in the prices of Hong Kong equities during the period. " said Mr Joseph Yam, Chief Executive of the HKMA. "As an illustration of the impact of such volatility on the returns on the Exchange Fund, the evaluation loss of the Exchange Fund's Hong Kong equity portfolio in the first half of this year were largely recouped as the Hang Seng Index rallied by over 1,000 points in the first three weeks in July. Since then, however, the market has fallen by about 780 points in the last three trading days of the same month." Mr Yam added. "Until the outlook for interest rates becomes clearer the investment environment for the rest of the year will remain uncertain and we can expect to see more ups and downs of this kind. The HKMA will continue its prudent management of the Exchange Fund in accordance with the guidelines set by the Exchange Fund Advisory Committee," he added.
An accompanying Statement of Valuation of the Hong Kong Equity Portfolio is also published (Annex 2), showing that the market value of the equity investments of the Portfolio at the end of June amounted to HK$170.9 billion.
Attachment
Annex 1: Exchange Fund Consolidated Balance Sheet
Annex 2: Statement of Valuation of the Hong Kong Equity Portfolio
For further enquiries, please contact:
Thomas Chan, Senior Manager (Press), at 2878 1480 or
Caitlin Wong, Manager (Press), at 2878 1687
Hong Kong Monetary Authority
31 July 2000
HONG KONG SPECIAL ADMINISTRATIVE REGION GOVERNMENT
EXCHANGE FUND
CONSOLIDATED BALANCE SHEET AS AT
(Expressed in millions of Hong Kong dollars)
30 June 2000 31 December 1999 30 June 1999
(Unaudited) (Audited) (Unaudited)
ASSETS
Cash and short-term funds 184,735 167,063 152,227
Fixed deposits 33,686 77,289 45,614
Certificates of deposit 23,866 4,982 7,131
Investments 694,153 738,464 721,146
Mortgage loans 7,681 8,727 10,329
Fixed assets 249 283 281
Other assets 22,044 17,598 24,420
------- --------- -------
Total assets (note) 966,414 1,014,406 961,148
======= ========= =======
LIABILITIES
Certificates of Indebtedness 96,075 118,195 89,895
Coins in circulation 5,758 5,777 5,688
Balance of the banking system 1,322 7,960 2,030
Exchange Fund Bills and Notes 104,875 101,828 98,700
Placements by other Hong Kong
Special Administrative Region
government funds 434,086 392,206 415,910
Placements by other institutions 12,946 29,099 32,048
Other liabilities 25,293 67,890 49,964
------- --------- -------
Total liabilities 680,355 722,955 694,235
------- --------- -------
ACCUMULATED SURPLUS 285,884 291,270 266,757
MINORITY INTERESTS 175 181 156
------- --------- -------
286,059 291,451 266,913
------- --------- -------
966,414 1,014,406 961,148
======= ========= =======
Note:
Total assets comprise:
Foreign currency assets 769,007 758,233 705,619
Hong Kong dollar assets 197,407 256,173 255,529
------- --------- -------
Total assets 966,414 1,014,406 961,148
======= ========= =======
Statistics on total foreign currency assets and forward foreign exchange transactions are as follows:
Foreign currency assets excluding
forward transactions 769,007 758,233 705,619
Net forward transactions - 249 454
------- --------- -------
Total 769,007 758,482 706,073
======= ========= =======
US$ million equivalent 98,650 97,573 91,002
HONG KONG SPECIAL ADMINISTRATIVE REGION GOVERNMENT
EXCHANGE FUND
HONG KONG EQUITY PORTFOLIO (Note 1)
STATEMENT OF VALUATION
AS AT 30 JUNE 2000
A. EQUITY VALUATION
The market value of the equity investments of the Portfolio was HK$170,905 million as at 30 June 2000 (HK$218,806 million as at 31 December 1999).
B. EQUITY DISPOSAL (1 January - 30 June 2000)
During the period, a portion of the Portfolio's shares were sold, under the terms of the Tap Facility for the Tracker Fund of Hong Kong for a gross consideration of HK$23,593 million.
C. SHAREHOLDINGS EQUAL TO OR IN EXCESS OF 10%
Number of shares held Percentage Company as at 30 June 2000 shareholding ------- ------------------ ------------ Swire Pacific Ltd. 'A' 98,730,274 10.50%
Note 1:
This Portfolio includes two parts: around HK$48 billion to be retained as a long-term investment of the Exchange Fund and the balance to be disposed of in an orderly manner without disruption to the market.
Exchange Fund Investment Limited
31 July 2000
| © Copyright 1996-2006 irasia.com Ltd. All rights reserved. Tel: (852) 2831-9792. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com Ltd be liable
for damages resulting from the use of the information provided on this website.
TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |