Enrolment rush fuels golf club debenture prices

GOLF club debentures are an alternative investment that can yield millions in capital gains.

But debentures appear headed for dangerously high price levels. Analysts say so far there are no signs of lessening demand.

Thomas Goetz, managing director of Hong Kong Debentures Exchange, said outlay for single nominee corporate members - that is, purchase price of a membership that allows a single company executive to enjoy perks and facilities of an exclusive club - ranged from $300,000 to $9.5 million at the Royal Hong Kong Golf Club.

Mr Goetz, who acts as a broker in the so-called secondary membership market, said: ''The whole thing started out as nice clean data bank matching sellers with buyers. The sellers would be relocating or companies would be down-sizing and the buyers were newcomers to the territory, so everyone was happy.'' Now, the market has transformed. Mr Goetz said a good barometer of the market was Clearwater Bay Golf and Country Club and Discovery Bay at which there were 2,000 members each. Debentures in the clubs were worth $2 million.

Debentures came on to the market about 20 years ago and their values grew along with the golfing boom in Southeast Asia.

At the Royal Hong Kong Golf Club (RHKGC), the waiting list for full membership stretches to more than 20 years.