The Exchange Fund's investment income rose to $47 billion in the first half of this year, up 53% on the same period last year, the Monetary Authority says.

This investment income includes a $15.1 billion gain on Hong Kong equities, a $12.1 billion rise on other equities, a $7.5 billion exchange gain from the appreciation of other currencies against the US dollar, and a $12.3 billion boost from bonds and other investments.

Interest and other costs of $5.1 billion were incurred during the period while payment to fiscal reserves amounted to $13.3 billion. After deducting these two items the net investment income was $28.6 billion, which was added to the Exchange Fund's accumulated surplus.

At the end of June the accumulated surplus stood at $536.3 billion.

Total assets of the fund stood at about $1.257 trillion at the end of June, up $80.5 billion on the end of 2006.

Future outlook

The authority's Chief Executive Joseph Yam said despite continued global economic growth so far this year, financial markets experienced sharp volatility.

"It is nevertheless encouraging that, notwithstanding these sharp and unexpected market movements, the Exchange Fund has been able to earn an investment income of $47 billion in the first half of the year."