The Hong Kong Monetary Authority’s Exchange Fund reported a 37% decline in first-half earnings, driven by losses in local equities and softer returns from its bond portfolio.
The results highlight the dual pressure on the territory's sovereign wealth vehicle as it navigates a challenging domestic market environment alongside global fixed-income volatility.
The slump in Hong Kong equities weighed heavily on the fund's performance, reflecting the broader struggles of the local market.
Hong Kong has emerged as the worst-performing major equity market this year, failing to capture the momentum of the global artificial intelligence trade that has buoyed technology valuations elsewhere.
While the MSCI Asia Pacific ex-Japan index and Japan’s Nikkei 225 also retreated recently, the local market's underperformance has been particularly acute.
In addition to equity losses, the fund faced headwinds from weaker bond income.