TNAG-1773-FCO40-2525-Hong-Kong-Exchange-Fund-Hong-Kong-Futures-Exchange-Limited--1988 — Page 90

CONFIDENTIAL

INVESTMENT RESULTS FOR 1987

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19.

As at 31 December 1987, the Fund's assets amounted to $118,834.6 million, an increase of $30,243.2 million (34.14%) from

31 December 1986. The Fund's liabilities at 31 December 1987

amounted to $61,560.4 million, an increase of $15,876.4 million

(34.75%) from 31 December 1986.

20.

Excluding the contingency reserve, total assets, at 31 December 1987, exceeded liabilities by $53,524.2 million. The

corresponding figure for 31 December 1986 was $39,157.4 million. On

this basis, assets as a percentage of liabilities for 1987 and

earlier years were as follows:

Year

Assets as a percentage

of liabilities

1983

1984

1985

1986

1987

180.71

184.48

180.93

185.71

186.94

In these calculations the exchange equalisation reserve created with effect from 1 January 1983 and the investment equalisation reserve created with effect from 1 January 1985 are, for comparison

purposes, treated as though they were part of the accumulated

surplus. If the amounts of the reserves are deducted from total

assets, the asset/liability cover at 31 December 1987 would be

reduced from 186.94% to 137.59%. At 31 December 1987, the asset

cover for the excess note issue and coins in circulation, after

deducting the amount necessary to provide 100% cover for all other

liabilities, was 289.13% (31 December 1986 : 278.21%). If the two

equalisation reserves were excluded, the cover would be reduced to

181.76% (31 December 1986: 181.95%).

CONFIDENTIAL

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