Xu Zhengyu: The 4.25% guaranteed interest rate for silver bonds is attractive. The joint lead underwriters suggest subscribing for 20 to 30 lots.

The Hong Kong government has issued a new batch of silver bonds with a guaranteed interest rate of 4.25%. At a press conference, the Secretary for Financial Services and the Treasury, Christopher Hui, pointed out that the interest rate for this batch of silver bonds was based on a basket of factors such as market conditions, prices of similar products, and interest rates. The Hong Kong government is confident that the product is attractive. Regarding whether external interest rate hikes will affect the products appeal, Huang Zizhuo, the head of the Hong Kong Capital Markets and Securities Services Department at Hong Kong Shanghai Banking Corporation Limited, stated that the market expects the U.S. to raise interest rates 1 to 2 times, involving a rise of 0.25% to 0.5%. He believes that the current interest rate is sufficient to meet the potential returns needed after the U.S. interest rate hike and thus does not think this rise will impact the quality of the assets. Zhou Guochang, the general manager of the Personal Financial Products Division at BOC HONG KONG (02388), pointed out that due to ongoing geopolitical tensions, he believes stock and bond prices will remain volatile. The stability, predictability, and liquidity of the silver bonds, along with the ability to redeem them at any time for a full return of principal, make the guaranteed interest rate of 4.25% appropriate. He anticipates that there is a high likelihood that over 300,000 people will apply this year. The bank recommends that clients consider applying for subscriptions of 20 to 30 lots of these silver bonds based on their own asset situation. Christopher Hui also noted that this issuance of silver bonds is based on the bond issuance plan established at the beginning of the year, aimed at deepening public understanding, and that the retail segment has shown interest from elderly investors. As for the number of eligible applicants, there are 2.47 million this year. Additionally, to prevent a large number of bonds from being concentrated in the hands of a few investors, the maximum allocation per person will remain at HKD 1 million, or 100 lots of bonds. The issuance amount for this batch of silver bonds will be maintained at a maximum of HKD 55 billion. Chan Wai-man, Vice President of the Hong Kong Monetary Authority, pointed out that during allocation, a balance between institutional and retail proportions must be maintained. This issuance amount accounts for one-third of the annual bond issuance plan quota of HKD 160 billion, which is considered quite substantial.