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HA takes forward its second phase investment strategy

The following is issued on behalf of the Housing Authority:
     The Housing Authority's (HA) Finance Committee (FC) today (January 9) endorsed detailed arrangements for taking forward the second phase of its investment strategy.

     "Based on prudent financial principle, the HA's investment strategy aims at enhancing return through diversification without increasing the overall level of risk," said the Chairman of the FC, Mr Chung Shui-ming.

     "The review of its investment strategy is one of the initiatives of the HA to utilise its available resources to maintain the long term sustainability of its public housing programme," he added.

     In June 2005, members of the FC reached general consensus on HA's future investment strategy after considering the findings and recommendations of an investment consultant.

     FC endorsed in April 2006 the selection of six global bond fund managers and their allocations totaling around $22.5 billion (45% of HA's fund) under the first phase. Placements of funds with the managers were made in July 2006.  

     The second phase involves further diversification of 25% of HA's fund into global equity. The remaining 30% of HA's fund will continue to be managed by the Housing Department mainly in bank deposits to meet the cash flow requirements of HA's operations.

     The FC today endorsed the appointment of six global equity fund managers and their allocations totaling around $12.5 billion (25% of HA's fund) following a selection process by the FC's Funds Management Sub-Committee (FMSC).

     "If things go smoothly, it is estimated that the placement of funds can be made by the end of the first quarter of this year," said Mr Chung.

     The FMSC has been set up under the FC to select and monitor fund managers and to conduct regular review of HA's investment strategy.

     Under the Housing Ordinance, approval of the Financial Secretary will be sought for the new asset class. Moreover, final approval for the appointment of the global equity fund managers has to be sought from the Housing Department Tender Board.  

Ends/Tuesday, January 9, 2007
Issued at HKT 14:24


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