HK plans to sell US$1.3b of inflation-linked bonds
Source: Bloomberg News |
May 29, 2012, Tuesday
|
Print Edition
Print Edition
HONG Kong will sell as much as HK$10 billion (US$1.3 billion) of inflation-linked bonds, the second sale in a year, next month.
The government will start selling the three-year debt to residents from June 5 to June 13, K.C. Chan, the city's financial services secretary, said at a briefing yesterday.
Hong Kong first introduced the bonds last year to help citizens preserve purchasing power and boost its local debt market after inflation accelerated. Demand may surge as investors who missed out on the first sale pile in, Chan Ying Kit, a corporate finance officer at Phillip Securities (HK) Ltd, said in Hong Kong.
"With the stock market continuing to be depressed and Hong Kong dollar interest rates remaining low, this product may lure local residents," said Raymond Yeung, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd.
HSBC Holdings Plc offers 0.2 percent interest on 12-month deposits of at least HK$1 million, according to its website.
The city's Hang Seng Index has risen 2 percent this year.
"I believe the bonds will remain attractive to investors even though inflation is expected to ease," Financial Services Secretary Chan said.
"Interest rates are still quite low, and traditional fixed income products don't offer much returns."
The government will start selling the three-year debt to residents from June 5 to June 13, K.C. Chan, the city's financial services secretary, said at a briefing yesterday.
Hong Kong first introduced the bonds last year to help citizens preserve purchasing power and boost its local debt market after inflation accelerated. Demand may surge as investors who missed out on the first sale pile in, Chan Ying Kit, a corporate finance officer at Phillip Securities (HK) Ltd, said in Hong Kong.
"With the stock market continuing to be depressed and Hong Kong dollar interest rates remaining low, this product may lure local residents," said Raymond Yeung, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd.
HSBC Holdings Plc offers 0.2 percent interest on 12-month deposits of at least HK$1 million, according to its website.
The city's Hang Seng Index has risen 2 percent this year.
"I believe the bonds will remain attractive to investors even though inflation is expected to ease," Financial Services Secretary Chan said.
"Interest rates are still quite low, and traditional fixed income products don't offer much returns."
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