Themis Qi
Hong Kong’s senior investors will each be allocated up to a record of 24 board lots of silver bonds after the number of subscribers dropped by over 7 percent from a year ago.
This means investors stand to get as much as HK$9,600 from interest per year before the inflation-linked interest rates are adjusted.
The government yesterday announced the allocation results of the ninth batch of silver bonds, which offers the investors – local residents aged 60 or above – a minimum interest rate of 4 percent amid an interest rate cut cycle.
The notes issued by the SAR government recorded a total booking amount of HK$69.98 billion from 300,413 valid applicants, oversubscribed by nearly 40 percent.
The oversubscription led the government to raise the final fundraising amount to HK$55 billion, as estimated last week based on preliminary data.
Among the applicants, 166,177 investors subscribing to 23 or fewer board lots are allocated the full amount being applied for. Each board lot costs HK$10,000.
The remaining 134,236 subscribers are each allocated 23 board lots, of whom 18 percent – 23,737 applicants – are each issued one additional unit.
The maximum allocation of 24 board lots exceeded the 23 units of last year, setting a new record since the annual issuance started in 2016.
However, the total subscription amount is 2.4 percent less than that of the previous batch, with the number of applications being 7.2 percent fewer.
Calling the response positive, Financial Secretary Paul Chan Mo-po said silver bonds provide senior residents safe and steady returns.
The bonds, due to be issued tomorrow, will not be traded in the secondary market. With a three-year tenor, the latest batch of silver bonds will have interest paid every six months.
The ninth batch of silver bonds also marks the first time that silver bonds are issued under the infrastructure bond framework.
Proceeds are marked for nine projects including the Hung Shui Kiu/Ha Tsuen New Development Area’s second phase in the Northern Metropolis.
Banks are also making refund offers.
For example, China Citic Bank International said it would provide interest rates of up to 5.28 percent per annum if returned funds were to be placed under a certain scheme of the bank this month.
Meanwhile, some smaller banks are raising the interest rates of short-term time deposits from around 3 percent to 6 percent amid signs that fundraising activities in Hong Kong are becoming active again due to several large initial public offerings.