Jake's View | Why I’m not buying the government’s new silver bonds
In spite of an attractive 2pc yield, government bonds targeted for the elderly could be more hassle than they’re worth
Financial Secretary John Tsang Chun-wah is expecting a “decent” response to the city’s first batch of government bonds targeted for the elderly when applications open tomorrow,
City, July 25
I happen to be eligible for these silver bonds. I hold a valid Hong Kong ID card, I will be 65 by December 31 and, having just returned from a holiday in Canada, I am no longer located there, which, for some reason, would have disqualified me. Don’t ask me why.
I also cannot deny that these so-called bonds offer a reasonable investment. They have a three-year term during which they will yield the rate of consumer inflation or a minimum of 2 per cent. As the chart shows, this would have been distinctly better over the last six years than other government three-year securities.
But I shall not apply.
The government does not need the money, which suggests to me that this is mostly about ambitious people in the civil service trying to look good
In the first place, I refer to these things as “so-called” bonds because real bonds can be bought and sold in the market. These cannot be. If you want out you will have to beg and say “please, please”. You will then only get your unpaid interest at the minimum 2 per cent and no premium for capital value.