HKMA Yu Wai-man: The investment environment continues to be full of challenges: 4 ways to manage the Exchange Fund flexibly

The financial market has been volatile this year. The President of the HKMA, Yu Weiwen, pointed out that the financial system of Hong Kong and Hong Kong is strong enough to withstand the fluctuations of the global market. The HKMA will make arrangements in four aspects for the uncertainties of the global economy and financial market. He also stressed that there is no sign of large-scale Short selling or impacting the Hong Kong dollar, capital inflows and outflows are normal.

In an exclusive interview with the Mainland "Securities Times", Yu Weiwen pointed out that the investment environment in 2022 will continue to be full of challenges. With rising inflation, major central banks around the world may implement more aggressive monetary tightening policies; if the geopolitical situation continues to deteriorate, it will also lead to The asset market experienced large fluctuations and adjustments.

The global stock market has been adjusted in the first quarter due to the high valuations established in the past few years. If the monetary policy is tightened rapidly and the bond interest rate rises sharply, the Exchange Fund's stock and bond investments will face severe challenges at the same time. .

Manage the Exchange Fund flexibly in response to changing market conditions

In the face of uncertainties in the global economy and financial markets, Yu Weiwen pointed out that the HKMA has been flexibly managing the Exchange Fund in response to changes in market conditions, adjusting asset allocation in a timely and appropriate manner, and making appropriate defensive deployments, including: raising interest rates in the United States As expected, the Exchange Fund has increased the ratio of cash to floating-rate bonds. Floating-rate bonds allow the HKMA to minimize the negative impact of bond "rate rises and prices fall"; the Exchange Fund has always properly adjusted the foreign exchange generated by non-US dollar assets risk in order to reduce the book exchange losses caused by the further strengthening of the US dollar; in the past few years, by holding investment products that resist inflation, and increasing the “long-term growth portfolio” of alternative investments (including real estate and infrastructure investments, etc.) physical assets) to diversify the investment portfolio and diversify risks more effectively; continue to maintain the liquidity of the asset portfolio, ensure that funds can be provided quickly when needed to maintain Hong Kong’s monetary and financial stability, and cooperate with the government to draw fiscal reserve deposits to Respond to the outbreak.

Yu Weiwen added that based on the latest data and financial market conditions, Hong Kong's monetary and financial systems are still very stable, the Hong Kong dollar market continues to maintain smooth and orderly transactions, and the market liquidity is abundant. There are large-scale short selling or impact on the Hong Kong dollar.

Yu Weiwen pointed out that Hong Kong, as an international financial center, has a normal flow of capital and personnel.

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It is normal for funds and personnel to enter and exit the international financial center

When asked whether financial institutions are withdrawing from Hong Kong, Yu Weiwen pointed out that, as an international financial center, the inflow and outflow of funds and personnel is normal in Hong Kong. Deployment in Hong Kong.

He continued that in recent years, many world-leading financial institutions have expanded their businesses in Hong Kong, including banks, private equity funds, and asset management groups.

These financial institutions understand that Asia is the center of global economic growth. By hiring more staff and expanding their business in Hong Kong, they can make better use of Hong Kong's advantages and help them further expand their wealth management business in the region.