Hong Kong’s Retail Green Bond receives enthusiastic response from small investors on first day of sale

Hong Kong investors rushed to subscribe to the inaugural Retail Green Bond on the first day of sale on Tuesday. The note, which offers individual investors bite-size chunks that promise to beat inflation, has set a milestone in the city’s plan to become a hub for environmentally conscious financial products.

Investors can subscribe to the three-year, 2.5 per cent bond in minimum lots of HK$10,000 (US$1,275) online from HSBC, Bank of China (Hong Kong) and a number of the city’s licensed banks until 2pm on May 6. An initial tranche of HK$15 billion has been earmarked, with the option to increase to HK$20 billion if there is demand.

Most banks involved in the offering said their first-day subscriptions were strong. HSBC, the biggest of the city’s three currency-issuing banks, saw “an encouraging response” with over 80 per cent of the subscriptions done online, according to a spokesman. Bank of China (Hong Kong) said it had received several thousand applications, with each subscription averaging HK$70,000.

CMB Wing Lung Bank said applicants had subscribed to HK$210,000 worth of bonds on average, while the highest was HK$10 million. ICBC Asia saw subscriptions of HK$110,000 on average, with one application of HK$5 million.

Bright Smart Securities, one of the largest brokers in the city, said 8,500 investors had applied, with most subscriptions exceeding HK$50,000.

Green bonds are fixed-income financial products designed to fund environmentally friendly projects. The offering forms an important move to support Hong Kong’s plan to increase the use of wind, waste-to-energy projects and solar power to generate electricity to reach carbon neutrality by 2050.