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HONG KONG - THE Hong Kong Exchange Fund (HKEF) made a record loss of 48.3 billion Hong Kong dollars (S$9.46 billion) in the third quarter, as the city was hit by the global financial crisis, officials said on Friday.
The figure follows a HK$20.4 billion loss in the second quarter and brings the Fund's losses for the first nine months of the year to HK$83.3 billion, the Hong Kong Monetary Authority said.
Mr Joseph Yam, chief executive of the city's de facto central bank, said they were facing 'unprecedented challenges' in managing the fund in the financial crisis and warned of further losses.
'The situation in October was indeed very bad. As a result, I expect losses will continue to be incurred in the fourth quarter', he told lawmakers on Friday.
'This means that it will not be surprising to have an overall loss of more than HK$83.3 billion'.
The fund's losses from January to September were mainly due to its stock investments.
It lost a total of HK$56.9 billion on local stocks after the benchmark Hang Seng Index fell 35 per cent during the nine-month period. It has also lost HK$43.2 billion to its overseas stock investments, according to Dow Jones Newswires.
But its in bonds generated a profit of HK$30.6 billion over the same period.
The fund posted record earnings of HK$142.2 billion in 2007, up from HK$103.8 billion in 2006.
The fund, which is made up of a variety of assets including stocks and bonds, amounted to HK$1.426 trillion as of September 30.
It is used by the Monetary Authority to maintain the Hong Kong dollar's peg to the US dollar and ensure financial stability in the territory.
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