HK banks have little exposure to Fannie, Freddie -HKMA
HONG KONG, July 17 (Reuters) - The impact on Hong Kong of problems affecting U.S. mortgage lenders Fannie Mae (FNM.N) and Freddie Mac (FRE.N) should be limited because local banks have little exposure, local newspapers reported on Thursday.
The Hong Kong Monetary Authority, the central bank, said only 0.1 percent of the assets of Hong Kong-incorporated banks were invested in the two big U.S. mortgage companies.
The HKMA would not disclose whether its Exchange Fund, which invests a portion of government income and is used to back the Hong Kong dollar HKD=, has holdings in either mortgage lender, saying it was "market sensitive".
The Standard newspaper quoted HKMA Chief Executive Joseph Yam as saying on Wednesday that the fund had a "prudent" strategy that would minimise any possible losses.
The HKMA has said the Exchange Fund will post a loss for the first half year as a result of a slump in financial markets.
Hong Kong's equity market fell 20 percent in the first six months of this year. (Reporting by Susan Fenton; Editing by Anne Marie Roantree)
