(Yicai) Jan. 29 -- The Hong Kong Monetary Authority’s Exchange Fund, which is used to defend the local currency, had an investment income of HKD212.7 billion (USD27.2 billion) last year, benefiting from the rebound in overseas stock markets.

Based on the special administrative region’s permanent population of 7.3 million, the Exchange Fund made the equivalent of HKD30,000 (USD3,839) per person, HKMA data showed on Jan. 26.

The Exchange Fund gained HKD144 billion from bonds, HKD73.2 billion from stocks, and HKD11.5 billion from other investments, but lost HKD15.5 billion (USD2 billion) on Hong Kong-listed shares and had a negative currency exchange effect of HKD500 million (USD64 million) on non-Hong Kong dollar assets.

Foreign government bond yields reached a near two-decade high last year, while stock markets in the United States, Japan, Europe, and India neared or topped record highs. Gains from investments in other stock markets fully offset losses from those in Hong Kong-listed stocks. 

Geopolitical risks remain the biggest unknown factor this year, said HKMA Chief Executive Eddie Yue said in a statement posted on the regulator’s website. The Russia-Ukraine conflict, conflict in the Middle East, and the situation in the Red Sea will likely have a major impact on global economies and financial markets, he added. 

“We will also continue our investment diversification to strive for higher long-term investment returns and ensure that the Exchange Fund will continue to serve its purpose of maintaining the monetary and financial stability of Hong Kong in an effective manner,” Yu noted. 

The Hang Seng Index fell for a fourth straight year in 2023, marking the bourse’s longest decline. As of Jan. 26, the stock market gauge was down 5 percent since the start of the year and nearly 28 percent from a year earlier.

To achieve a sustainable recovery in the stock market, an additional USD1 trillion to USD2 trillion of government stimulus is needed this year and next, Laura Wang, chief China equity strategist at Morgan Stanley, told Yicai. 

Editors: Shi Yi, Martin Kadiev