Bank of China Hong Kong: The tenth batch of silver bonds is in high demand with total subscriptions expected to exceed HKD 70 billion.

On September 15th, the 10th batch of silver bonds issued by the Hong Kong government began accepting subscriptions. Leung Shuk Yee, Deputy General Manager of the Personal Financial Products Department of BOC HONG KONG, stated that with expectations of loose monetary policy, the attractive interest rate of silver bonds, combined with the maturity of silver bonds in 2022, the matured funds may be reinvested into new bonds. She estimated that the number of subscribers this time would exceed the previous 300,000 people, with a total subscription amount expected to exceed HK$70 billion, and the total issuance amount may have the opportunity to increase to HK$55 billion. She mentioned that the market expects the Federal Reserve to restart an interest rate cut cycle, with a 0.25% cut expected this week and another 0.25% cut before the end of the year, and Hong Kong banks may also follow suit with interest rate cuts. The current batch of silver bonds guarantees an interest rate of 3.85%, which is 0.15% lower than last year's 4%, but still more than 1% higher than the current market rate for 1-year fixed deposits. The silver bonds in this batch can provide a return of 3.85% over the next 3 years, which is quite attractive. She estimated that the chances of being successfully allotted shares this time would be similar to the previous batch and recommended clients to subscribe for 25 to 30 lots to increase their chances of success. As for whether the recent stock market rally would reduce the attractiveness of silver bonds, she believed that bonds and stocks are different products, with stock prices being more volatile, while silver bonds provide stronger defensive properties and stable cash flow, making them quite attractive.