Tourists take a boat ride in the Victoria Harbour, Hong Kong as they basked in the sunshine on Sept 4, 2023. (SHAMIM ASHRAF / CHINA DAILY)
Hong Kong’s second batch of retail green bonds witnessed its subscription amount total around HK$30.2 billion ($3.9 billion), twice as much as the government's target of HK$15 billion, with about 323,000 applications received.
A government spokesperson said on Wednesday that the final issuance is expected to amount to HK$20 billion as the retail green bond was “well received by the public.” The allocation results will be released on Oct 6.
According to the HKSAR government, the interest on the retail green bonds will be paid every six months with a rate linked to the city’s inflation rate, or a minimum rate of 4.75 percent, higher than that offered by most banks for fixed deposits.
For one-fifth of our Green Bond subscribers, it’s their first time taking up a government bond program with us. There is growing interest in these, and more demand for safe investment options, especially given uncertainty in the local stock market.
Sami Abouzahr, head of customer wealth for HSBC Wealth and Personal Banking in Hong Kong
The bonds, offered at HK$10,000 per unit with a tenor of three years, will be issued on Oct 10 and listed on the Hong Kong Stock Exchange the following business day. The bonds can be traded in the secondary market afterwards.
Proceeds raised under the green bond program will be used for financing government projects with environmental benefits.
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China CITIC Bank International said the total subscription amount rose 30 percent from the first batch last year, with the number of subscribers slightly increased.
The bank said the average subscription amount was HK$100,000 and the highest by one investor amounted to 100 lots, or an investment of HK$1 million.
Sami Abouzahr, head of customer wealth for HSBC Wealth and Personal Banking in Hong Kong, said that the average client subscription increased by around 25 percent from the previous insurance.
“For one-fifth of our Green Bond subscribers, it’s their first time taking up a government bond program with us. There is growing interest in these, and more demand for safe investment options, especially given uncertainty in the local stock market,” he added.
Secretary for Financial Services and the Treasury Christopher Hui Ching-yu (center) hosts a press conference to announce the launch of a new batch of retail green bonds, on Sept 5, 2023, in Hong Kong. (PHOTO PROVIDED TO CHINA DAILY)
Bright Smart Securities & Commodities’ Co-chief Executive Edmond Hui Yik-bun said the oversubscription of the latest offering of green bonds is in line with expectations as its promised return rate of 4.75 percent and safety of principal makes it a safe bet for subscribers.
READ MORE: New green bond issuance offers investors higher coupon rate return
According to Hui, the biggest deal Bright Smart received was HK$3 million, or 300 lots.
The government has so far issued close to $22 billion worth of green bonds since the Green Bond Program started in 2018.
The first batch of retail green bonds issued in 2022 was also well received by the public, with a total of 488,353 valid applications made by Hong Kong residents and with a subscription amount of HK$32.57 billion.
