MPF investors cut risks by $3.2b in June

Business | Stella Zhai and Bloomberg 22 Jul 2020

Hong Kong's Mandatory Provident Fund market recorded a net outflow of nearly HK$3.2 billion in June from risky assets, including the Greater China Equity Fund, Hong Kong Equity Fund and the Asian (ex-Japan) Equity Fund, when the Covid-19 pandemic weighed on the risk sentiment, according to MPF consultant Gain Miles.

In contrast, funds flowing to low-risk assets surged 88 percent over the previous month's figure of HK$1.7 billion, it said.

The total assets under MPFs was HK$968 billion as of June 30, an increase of HK$40 billion from a month ago with 90 percent from returns after deduction of related fees, Gain Miles said. This came when equities extended their gains in July and the local currency remained strong.

Meanwhile, the Hong Kong dollar strengthened to as high as 7.7509 versus the greenback yesterday, back near the strong end of its trading band at 7.75, boosted by Ant Group's listing plans in the local stock market.

In other news, an International Monetary Fund study found that global strengthening of the US dollar is likely to amplify a short-term fall in global trade and economic activities, resulting from both higher domestic prices of traded goods and services and negative balance sheet effects on importing firms.

Also, former Federal Reserve chairpersons Ben S Bernanke and Janet Yellen called for an investigation of the market plunge in March, with a view that hedge funds may have blown up the world's biggest bond market.

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