iBond 5, a type of low-risk, counter-inflation bond sold by the government.The final details of the subscription on 5 August. The fresh batch of iBonds will be issued two days later and listed on Hong Kong’s stock exchange on 10 August.
2.6 times over-subscription hit a record high.
The HKSAR’s fifth batch of inflation-linked bonds, namely iBond 5 (04228.HK), subscriptions closed on 29 July, it attracted a record 600,000 subscribers offering a total of HK$36.1 billion. Those figures represented increases of about 23% of applicants and 25% of subscription amount,respectively,compared with the iBond 4 held in August 2014. Based on the issue amount of $10 billion,
Interest rate to remain at around 3-4%. Around two-thirds of subscribers will receive two lots of iBond each, while the rest will hold only one lot each. Final details of the subscription will be announced on 5 August; the fresh batch of iBond 5 will be issued and listed on Hong Kong’s stock exchange on 10 August.
The Hang Seng Index fell about 4% during the iBond 5 subscription period (21 to 29 July), so the turbulence in the stock market may have attracted relatively more conservative investors to iBond.
Bank of China Hong Kong (2388.HK) and Dah Sing Bank saw their subscriber numbers surge 30 % from a year back with average per-person demand at six lots unchanged from 2014. Shanghai Commercial Bank also recorded a 20% increase in subscribers, with an average demand of five lots.
Gary Leung Wai-kei, deputy general manager of global markets at BOC HK, expects iBond 5’s interest rate to remain at around 3% amid the current low-inflation environment. But investors are being advised to hold on to the debt instrument.
Leung estimates iBond 5 to end at HK$103.50 to HK$104 on its debut before rising to HK$105 eventually.
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