What Was the Real Purpose of the HK$24 Billion MPF Injection?

Why did some call MPF a “market-support fund”?

One commentator argued MPF’s buy-and-hold nature — rarely trading, buying more than selling — works like a big player slowly absorbing market float, supporting prices over time. In a March 2011 blog post, the author noted the HK$24 billion government injection plus roughly HK$2.5 billion in net monthly inflows kept feeding the market, likening the effect to the government’s HK$100 billion 1998 intervention defending the peg, after which the Hang Seng crept back from 6,700.

How could the injection help grassroots savers?

MPF assets totalled HK$365.4 billion by December 2010. The author argued that a decade of repeated injections could build grassroots reserves past HK$100 billion; money flows upward, so cash in grassroots hands should mean a more stable society. Broad-based handouts are also fairest — and HK$6,000 not invested never grows beyond HK$6,000.

What did critics say?

Many preferred tax rebates as a direct benefit: high earners save anyway, low earners save little regardless. Still, when choosing funds, check MPF fund comparison so high fees don’t eat the injection’s benefit.