The HKMA announced today (3rd) the investment performance of the Exchange Fund in the first quarter of this year.
As of the end of March, the foreign exchange fund lost 55 billion yuan in investment during the period, and Hong Kong stocks, other stocks, and bonds lost 9.4 billion, 24.6 billion, and 34.7 billion yuan respectively. Only foreign exchange investment made money.
Looking through the data, the last time it suffered a loss was 2020. The Exchange Fund lost 86.1 billion yuan in the first quarter of that year, the worst quarter in history.
Yu Weiwen, president of the HKMA, said that the situation in Russia and Ukraine has triggered an escalating geopolitical crisis, triggering sharp fluctuations in asset prices in the stock, bond and foreign exchange markets.
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The geopolitical crisis heats up the "three kills" of stocks and bonds
This loss is not surprising.
The President of the HKMA, Yu Weiwen, wrote an article in Huisi as early as last Monday (25th), pointing out that the geopolitical crisis triggered by the situation in Russia and Ukraine since February became the "last straw" in the market, triggering stocks, bonds, foreign exchange The volatility of asset prices in the market poses serious challenges for global investors and the Exchange Fund.
Year-to-date, the dollar has strengthened, resulting in paper currency losses when non-dollar assets are denominated in U.S. dollars.
If the U.S. accelerates the pace of tightening monetary policy relative to other economies, the U.S. dollar continues to strengthen against other major currencies, and the Exchange Fund may fall into a difficult situation of "triple-strike" of stocks, bonds and foreign exchange!
Yu Weiwen reiterated today that defensive work has been deployed in recent months, and the proportion of non-US dollar assets has increased slightly.
Pang Baolin, managing director of Dongji Fund Management, pointed out that in the face of interest rate hikes and withdrawals in the United States, the Exchange Fund should focus on defense.
(Photo by Yu Bingfeng)
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Pang Baolin, managing director of Dongji Fund Management, believes that the stock investment of the Exchange Fund in the first quarter of this year was dragged down by Chinese concept stocks and large US technology stocks, both of which have fallen year-to-date.
Bonds, on the other hand, are directly affected by interest rate hikes. “Everything is the turn (turn), which reacts the most, from zero interest to interest; (companies) change from no profit to profit, and the stock price responds the fastest.” He pointed out that by The price difference earned by reducing the interest rate to zero interest is very large, but vice versa, "I made a lot of money before, but my family is going to retire!"
Pang Baolin agrees with Yu Weiwen's deployment of defensive work, and points out that holding cash is the most stable.
"The most important thing for the Exchange Fund is to maintain stability, and cash (cash) is the best. We have already cleared our positions in the Internet stocks at the beginning of the year, and half of the bonds are keep, and the other half are cash! However, our fund managers are all miserable, and inflation should be I want to buy it, but the family buys it!”
Looking forward to the investment strategy in the second quarter, Pang Baolin believes that defense should be the main focus in May, depending on the rate hike in May and June and the magnitude of QT (Quantitative Tightening).
He believes that the current attitude of the Federal Reserve is hawkish on the surface, but dovish in reality. interest rate hike), the impact is not that big!”
