Hong Kong raises size and guaranteed returns on its Silver Bond aimed at city’s 2 million elderly citizens

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Uploaded: 2022-08-09T11:02:20.000Z
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The guaranteed annual rate for the three-year bond has been raised to 4 per cent from 3.5 per for the previous batch issued a year ago

‘We believe such a return will give [Hong Kong’s elderly citizens] a safe investment instrument,’ says Clara Chan, an executive director at the HKMA

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The Silver Bond offers some 2 million senior citizens an investment that could help safeguard their savings against inflation. Photo: Felix Wong

Georgina Lee

Published: 7:02pm, 9 Aug 2022Updated: 7:09pm, 9 Aug 2022

The Hong Kong government has increased the size and guaranteed returns for its latest batch of Silver Bonds, offering some 2 million senior citizens an investment that could help safeguard their savings against inflation.

For the seventh batch of the inflation-linked bonds aimed at people aged 60 and above, the government has raised the size of the offering to HK$35 billion (US$4.5 billion), from the HK$30 billion issued in the last tranche a year ago.

It may choose to increase it again, to a maximum of HK$45 billion, according to Clara Chan, executive director (monetary management) at the Hong Kong Monetary Authority (HKMA), the city’s de facto central bank.

The guaranteed annual rate for the three-year bond has been raised to 4 per cent, from 3.5 per for the previous batch issued in August 2021. The bond will either pay that guaranteed annual rate, or a floating rate which is pegged to the city’s consumer price index, a measure of inflation, whichever is higher.

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Door-to-door vaccine services for housebound elderly and disabled residents in Hong Kong

“In our consideration, in raising the annual return to 4 per cent, we have considered the uncertainties surrounding the macro economic environment, and the Covid pandemic situation. We believe that such a return will give [Hong Kong’s elderly citizens] a safe investment instrument,” said Chan.

Based on data from the most recent government census, Chan said about 2.1 million citizens, more than a quarter of the city’s 7.4 million population, will be eligible for the bonds. The minimum age requirement has been lowered to 60 from 65 last year.