HK fund won't invest entirely in US assets: Yam

Hong Kong will not invest its Exchange Fund entirely in liquid US assets and the fund is keeping its distance from the sovereign wealth fund label, the head of Hong Kong's central bank said in an interview yestereday.

Speaking to specialist magazine Central Banking, Joseph Yam also said foreign exchange reserve holders are a stabilising force for global markets and maintaining financial stability is in their interest.

Total assets held by the territory's Exchange Fund declined HK$87.7 billion since late September to $172.6 billion at end-October, due to valuation losses on foreign currency investments and local equities.

Citadel closing Tokyo office, cuts local jobs

US hedge fund Citadel Investment Group LLC is closing its Tokyo office and its Asia principal investment operations by the end of this year, said company spokeswoman Katie Spring.

As a result of the cutbacks, 25 people will be laid off in Hong Kong and 12 in Tokyo, and the firm's Asian businesses will be run entirely out of Hong Kong, Dow Jones Newswires and Bloomberg reported.

Citadel officials in Hong Kong and at its Chicago headquarters could not be immediately reached for comment.

HK dollar in a tight range, interbank rates fall

The Hong Kong dollar nudged higher against the US dollar yesterday, while interbank rates remained soft due to abundant liquidity in the banking system.

Local interbank rates fell across the board. The one-month interbank offered rate was fixed at 1.09929 percent yesterday morning, down 8 basis points from Friday. The three-month HIBOR softened to 1.75143 percent from 1.78857 percent on Friday.

Reuters

(HK Edition 12/09/2008 page2)