Application of the Macau financial reserve secures return of 5.6% in 2019

26 February 2020

The return on investment of Macau’s financial reserve in 2019 reached 30.2 billion patacas (US$3.77 billion), corresponding to an annual return of 5.6%, said the Macau Monetary (AMCM).

The profitability achieved set a new record since the creation of the financial reserve in 2012, and the AMCM said this was due to applications benefitting from the significant recovery of capital markets.

The value of the financial reserve increased by 13.9% year-on-year in 2019 to 579.4 billion patacas (US$72.42 billion), and the basic reserve accounted for 148.9 billion patacas and the extraordinary reserve for 430.5 billion patacas.

The AMCM also said that the recovery experienced by the capital markets was due to the improvement in the trade dispute between China and the United States of America and the Brexit situation which gradually became clearer, along with successively more flexible monetary policies adopted by major central banks.

Forecasting what might happen in 2020, the Macau Monetary Authority expects significant pressure on stock markets where asset valuations are already high, taking into account the factors of uncertainty and the risk of a downturn of the global economy, as well as the outbreak of the new type of coronavirus at the beginning of the year.

It also mentioned that the monetary market climate of low or even negative interest rates is also challenging for management of investment of reserves, and the AMCM, given all these unfavourable factors, intends to “continue to optimise the application of assets according to market conditions, respecting the principles of ‘safety, efficacy and stability.’” (macauhub)