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Investment of Govt fund
The following is a question by the Hon Steven Poon Kwok-lim and a written reply by the Secretary for Financial Services, Mr Michael Cartland, in the Legislative Council today (Wednesday):
Question:
In view of the Barings incident, will the Government inform this Council:
whether any of the Government's funds, including its reserves, are managed by the Barings Banking Group; if so,
(a)
(i)
what the total amount is;
(ii)
(b)
(iii)
(iv)
whether any losses have been incurred and if so, how much;
what instructions have been given to the Group regarding the investment strategy to be adopted in investing the Government's funds; and
whether the Group is allowed to invest the Government's funds in derivatives; if so, are there any restrictions in investing in derivatives and what these restrictions are; and
whether, in the light of this incident, the Government has reviewed its policies and instructions in relation to investing Government funds and reserves through fund managers, and whether the Government has issued guidelines to statutory bodies in relation to their fund investments?
Reply:
On (i), Barings International Investment Management Limited (BIIL) has been an appointed manager for a portfolio of fixed income assets for the Exchange Fund. For both operational reasons and on grounds of commercial confidence the Monetary Authority does not disclose the sizes of the portfolios with the Exchange Fund's appointed mangers. Nevertheless, the sum total of all such portfolios is only a minor portion of the Exchange Fund in total.