Market worries about trade tensions between China and the United States (US) and rising yields of US treasury bonds affected investor sentiment, causing the three major indexes of the US stock market to fall significantly. The Macao SAR Government is closely monitoring developments in global financial markets in order to uphold the stability of the Macao’s economy and its financial system, while urging investors to pay close attention to market developments, remain vigilant and control risks. The Macao SAR Government has strong fiscal strength, good external financial position, a reliable linked exchange rate system and a sound financial system. The Macao SAR Government and the local financial system have sufficient capacity to cope with fluctuations in the financial markets.
The US stock market began to rise rapidly from end-2015 to early 2016. The Dow Jones Industrial Average rose from around 16,000 points to the historical high of 26,828 points in October 2018, equivalent to a cumulative rise of 67.7%. Review of past market performances indicated that the US stocks had experienced significant fluctuations in different economic conditions.
Macao SAR is a small open economy, unavoidably affected by external factors. Nevertheless, persistent economic growth, abundant foreign exchange reserves, prudent fiscal management and credible linked exchange rate system reflect Macao’s strong economic fundamentals and ability to withstand external risks. The latest indicators of the banking system have exhibited its strengths in capital adequacy, asset quality, profitability and liquidity. Meanwhile, the Fiscal Reserve of Macao SAR has a balanced allocation of diversified assets, which helps to diversify investment risks. The overall investment portfolio can withstand a certain degree of market volatility.
As ever, the Macao SAR Government will continue to closely monitor global economic and financial market situations as well as the stability of Macao monetary and financial markets through established mechanisms. We stand ready to take necessary actions to safeguard the stability of Macao economic and financial system. The Macao SAR Government would like to remind the pubic that the volatility of financial market may persist and increase; investors should remain vigilant, assess carefully and manage their risk exposure.