Macau government maintains prudent application of financial reserve

28 March 2017

The government of Macau will continue to implement the principles of safety, efficacy and stability in the management of investments of the territory’s financial reserve, the Secretary for Economy and Finance said on Monday.

Leong Vai Tac also said that the income from investments in debt securities were once again the largest source of income for the financial reserve, and those made in stock markets and foreign exchange recorded losses.

“The income of the financial reserve investments in 2016 amounted to 3.31 billion patacas (US$413.75 million), an amount corresponding to an annual return of 0.8%,” explained the secretary.

Leong said the government had instructed the Monetary Authority of Macau (AMCM) to assess and reasonably balance the general risks of the economic situation, based on the 2017 situation, to actively promote the diversification of the investment portfolio to preserve and enhance the financial reserve’s funds.

The president of the AMCM, Anselmo Teng, quoted by the Ponto Final newspaper, said the government intends to apply part of the financial reserve in the development of infrastructure and large-scale programmes in neighbouring Guangdong province.

Teng said this plan is still being prepared by the government but added that it plans to invest up to 20 billion renminbi (US$2.9 billion) in Guangdong province.

The chairman of the AMCM called for the diversification of the investment portfolio associated with the territory’s financial reserves, following losses of US$500 million in stock market assets in 2016. (macauhub)