The Exchange Fund posted its biggest half-year investment loss of HK$144.2 billion for the six months ending in June, the Hong Kong Monetary Authority announced on Friday.

Almost all asset classes were in the red, with bonds recording losses of almost HK$60 billion, Hong Kong equities off HK$8.5 billion and other equities registering losses of more than HK$73 billion.

Assets in foreign currencies shrank HK$12.8 billion, while other investments logged gains of HK$6.2 billion.

For the second quarter alone, the fund suffered an investment loss of HK$95.4 billion.

The results came on the heels of an investment loss of HK$48.8 billion in the first quarter.

HKMA chief executive Eddie Yue pointed out that the investment environment had been hit by the rare occurrence of a simultaneous slump in global bond and equity markets.

"The global financial markets struggled in the first half of 2022, facing intensifying inflationary pressures, tightening of monetary policies by major central banks, geopolitical conflicts and global economic slowdown," he said in a statement.

The massive fund that is used to back the Hong Kong dollar declined to HK$4.2 trillion following the latest losses.

The HKMA chief warned that the investment environment is expected to remain tough for the rest of the year.

"Challenging global investment conditions will continue to linger, such as further tightening of monetary policies by central banks amid persistently high inflation, further deterioration of geopolitical risks, and intensifying risk of recession in major economies," said Yue.