Hong Kong’s Silver Bonds attract record demand from senior citizens

The latest round of the Hong Kong government’s Silver Bonds attracted a record number of subscriptions in both quantity and value, as the city’s elderly investors seized the opportunity to secure better returns than those offered by bank deposits.

The total applications for the three-year Silver Bonds were twice the government’s latest issuance of HK$50 billion (US$6.4 billion). Investors submitted 373,000 bids for HK$98.52 billion worth of bonds during the offering period, which ended at 2pm on Monday, according to a government spokesman.

The number of applications increased 24 per cent compared with last year’s 300,413, while the total bid amount rose 40 per cent from last year’s HK$69.98 billion. That surpassed the previous record in 2023 of 323,783 bids for HK$71.7 billion worth of bonds, exclusively available to those aged 60 and above.

In light of the strong demand, the government is expected to raise the final issue size to the upper limit of HK$55 billion.

The Hong Kong Monetary Authority will announce the final allotment results on October 8, with the bonds set to be issued on October 10.

The government reduced the guaranteed coupon rate for its 10th batch of Silver Bonds to 3.85 per cent, down from 4 per cent last year, following a 25-basis-point cut by the US Federal Reserve on September 18.