Foreign currency reserves decrease
Hong Kong's foreign currency reserves stood at US$159.9 billion at the end of April 2008, according to the Hong Kong Monetary Authority, down from US$160.8 billion at end-March 2008.
Including unsettled forward contracts, the foreign currency reserve assets of Hong Kong at the end of April 2008 also stood at US$159.9 billion, compared to US$160.8 billion at end-March 2008.
Hong Kong is the world’s ninth largest holder of foreign currency reserves based on the latest published figures, after mainland China, Japan, Russia, India, Taiwan, Korea, Brazil and Singapore.
The total foreign currency reserve assets represent over seven times the currency in circulation or about 39% of Hong Kong dollar M3.
US$15.84 billion surplus recorded
The Hong Kong Special Administrative Region Government recorded expenditures of US$30.1 billion and revenue of US$45.94 billion, resulting in a surplus of US$15.84 billion in the 2007-08 financial year, which ended March 31.
A government spokesman said that the surplus represented a US$1.02 billion improvement compared to the US$14.82 billion surplus forecast in the 2008-09 Budget. He said the improved financial position is mainly due to the higher than expected collection of profits tax and stamp duties toward the end of the financial year. Revenue for the year was US$705.12 million higher than forecast. At the same time, expenditure for the year was US$320.51 million lower than forecast mainly as a result of the strenuous efforts of departments to rein in expenditure and spend only where necessary.
The territory's fiscal reserves stood at US$63.19 billion as of March 31.
Exchange Fund totals US$187.12 billion
Assets of the Hong Kong Exchange Fund totaled US$187.12 billion on March 31. This is US$307.69 million lower than at end-February, according to the Hong Kong Monetary Authority.
Foreign currency assets grew US$1.37 billion while Hong Kong dollar assets fell US$1.67 billion.
The rise in foreign currency assets is mainly due to valuation gains on foreign currency investments and interest and dividend income from foreign currency assets. These increases were offset partly by redemption of Certificates of Indebtedness.
The decline in Hong Kong dollar assets is mainly due to valuation losses on Hong Kong equities held by the Exchange Fund and fiscal drawdowns.
The Currency Board Account shows that the monetary base at the end of March 2008 was US$42.14 billion, a 0.8% decrease from end-February. The decline is mainly due to a decrease in Certificates of Indebtedness, which was partly offset by an increase in market value of Exchange Fund Bills and Notes outstanding.
Backing assets dropped 0.3% to US$46.55 billion. The decrease is mainly attributable to the redemption of Certificates of Indebtedness in the monetary base, which was partly offset by revaluation gains and interest from investments.
The backing ratio rose to 110.44% at end-March from 109.88% at end-February.
Chief Executive approves HKEx chairman
The Chief Executive of the Hong Kong Special Administrative Region has approved Ronald Arculli’s re-appointment as chairman of the Hong Kong Exchanges and Clearing Limited (HKEx), effective immediately.
The approval was made under the Securities and Futures Ordinance (SFO). Mr. Arculli’s chairmanship will coincide with his term as a director of the HKEx Board, which will expire at the end of the 2010 Annual General Meeting of HKEx.
The directors at the board meeting on April 25 elected Mr. Arculli Chairman of the HKEx. He is one of three directors appointed by the Financial Secretary to the Board of HKEx for a two-year term under the SFO. The other two directors are Laura Cha and Moses Cheng.
Mr. Arculli is the senior partner of Arculli Fong and Ng. He was a member of the Securities and Futures Commission Advisory Committee from 1989 to 1993, and a non-executive director of the Securities and Futures Commission from 1997 to 2000.
Mrs. Cha is the deputy chairman of the Hong Kong and Shanghai Banking Corporation Limited. She was the vice-chairman of the China Securities Regulatory Commission (CSRC) from 2001 to 2004. Prior to her appointment to CSRC, she was the deputy chairman of the Securities and Futures Commission from 1994 to 2001.
Mr. Cheng is the senior partner of P. C. Woo & Co. He was the chairman of Listing Committee of the Stock Exchange of Hong Kong in 2005-2006 and has served on the Financial Reporting Council since 2006.
The Board of HKEx comprises a maximum of six directors elected by shareholders, the Chief Executive of HKEx and a maximum of six directors appointed by the Financial Secretary.
The other incumbent directors appointed by the Financial Secretary are Messrs Marvin Cheung, Henry Fan and Fong Hup.
The appointments are made under the SFO. The ordinance, together with HKEx’s Articles of Association, empowers the Financial Secretary to appoint no more than six people to be members of the board of directors of HKEx where the Financial Secretary is satisfied that it is appropriate to do so in the interest of the investing public or in the public interest.
Treasury association made progress in 2007
At the Annual General Meeting of the Treasury Markets Association (TMA) on April 30, the Chairman of the Executive Board and Deputy Chief Executive of the Hong Kong Monetary Authority (HKMA) Eddie Yue reported that the TMA had another fruitful year in 2007. During that time, it furthered its mission of promoting the professionalism and competitiveness of the treasury markets in Hong Kong.
“Capitalizing on the opportunities arising from the mainland (China) market, the TMA took an active part in facilitating the first renminbi bond issuance in Hong Kong,” said Mr. Yue. “We also showcased Hong Kong’s treasury markets and financial infrastructure to our Mainland counterparts by organizing the Treasury Markets Summit in Beijing last December. In addition, the TMA enhanced the competitiveness of the Hong Kong treasury markets by studying the potential of developing Islamic financial services in Hong Kong and promoting Hong Kong’s role as a regional treasury center.”
Going forward, Mr. Yue said the TMA will not only leverage the Mainland’s development, but also will assist the treasury market practitioners in tapping the growing Islamic financial market and other business opportunities from the region.
At the end of 2007, the TMA had 86 institutional members including banks, investment banks, money brokers, fund management houses, major corporations, and approximately 2,000 individual members working in various segments of the treasury markets such as foreign exchange, fixed income instruments and derivatives.
Chief Executive of the HKMA Joseph Yam continues to serve as the Honorary President of the Council while Mr. Yue was re-elected as the Chairman of the Executive Board.
The TMA also published its Annual Report for 2007, which reviews the activities and achievements of the Association during the year. The report is available on the TMA Web site [www.tma.org.hk].
|
