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Hong Kong’s elderly throng to inflation fighting investments with record high demand for Silver Bonds
- The government’s offering of bonds that protect against inflation receives strong response as city’s elderly seek income boost in an uncertain economic environment
- The bonds, with a tenor of three years, will pay a 5 per cent coupon and is open only to citizens aged 60 years and above
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The Hong Kong government’s latest offering of Silver Bonds - designed to protect senior citizens’ savings against inflation - logged a “record high” response when it opened for subscriptions on Friday, banks managing the issue said.
The government is offering HK$50 billion (US$6.4 billion) of Silver Bonds for sale to those aged 60 years and above to boost their income in an uncertain economic environment. The HKMA said it may increase the offering size to HK$55 billion to meet the excess demand.
HSBC, the biggest of the city’s three currency issuing banks, said the latest batch of Silver Bonds had received “record high subscription.”
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“Customers have shown a strong interest in the latest batch of the government-backed Silver Bond, which offers 5 per cent in guaranteed annualised return,” according to a statement from HSBC.
“In terms of value and volume, HSBC saw a record high subscription by its customers on the first day. Digital banking continued to gain in popularity as the [main] subscription channel.”
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The latest batch of Silver Bonds has a three year tenor and will pay a guaranteed annual coupon of 5 per cent, versus 4 per cent in the previous sale in August 2022. The response underlines the rising cost of living in Hong Kong, already ranked one of the world’s most expensive cities.
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