The Hong Kong Monetary Authority (HKMA) predicted more business opportunities for Hong Kong's banking sector this year in its annual report published Monday in Hong Kong.

The HKMA said that with the economic growth continued to gather pace and the implementation of the programs under Closer Economic Partnership Arrangement (CEPA), the banks revenue sources will be broadened.

The HKMA also showed optimism for the outlook of macro-economy, trade and labor market in 2004.

Joseph Yam, chief executive of the HKMA, said in a statement on the report that after six years of difficulty and uncertainty, Hong Kong's economy had experienced a strong rebound in the second half of 2003. The rebound was helped by a more benign global environment and was boosted by measures to strengthen economic ties between Hong Kong and the Chinese mainland.

The economic impact of the Severe Acute Respiratory Syndrome (SARS) had been short-lived, and some important sectors of the economy, such as merchandise trade, were hardly affected at all, he added.

"During this eventful and turbulent year, the HKMA achieved its objectives of maintaining currency stability, promoting the safety and stability of the banking system, and enhancing the efficiency, integrity and development of the financial system," said Yam.

Despite the difficult second quarter and considerable volatility in the world's main currencies, he noted, the Hong Kong dollar continued to be stable under the Linked Exchange Rate system in 2003.

Hong Kong's banking system remained stable and effective while the banking sector as a whole managed to show an increase in profits for the year, thanks to the markedly improved economic conditions in the second half of the year and to their own efforts to diversify business, he added.

According to the report, Hong Kong's Exchange Fund, which is managed by the HKMA, produced an investment return of 10.2 percent, 70 basis points higher than the benchmark previously set.

Source: Xinhua