Hong Kong Exchange Fund records smallest gain in 5 quarters amid Middle East crisis

Hong Kong’s Exchange Fund, the war chest used to defend the local currency, reported its smallest investment gain in five quarters as the Middle East crisis weighed on stock market performance.The fund gained HK$34.5 billion (US$4.4 billion) in the first quarter, 56 per cent lower than HK$79.2 billion a year earlier, according to data released by the Hong Kong Monetary Authority (HKMA) on Monday. The fund still managed to report its fifth consecutive quarterly gain, but it was the smallest gain among the five quarters.The Exchange Fund, which has investments in Hong Kong and overseas stocks, was hit hard by a stock market slump in March following the start of the US-Israel war on Iran on February 28, as investors shifted from stocks to cash or other safer bets.