The Hong Kong Financial Secretary Paul Chan Mo-po center secretary for Financial Services and Treasury Christopher Hui Ching-yu third right Deputy Chief Executive of the Hong Kong Monetary Authority Edmond Lau third left and other government officials attend a press conference on the launch of the first retail green bond under the Government Green Bond Programme, February 15, 2022. The Hong Kong Special Administrative Region government's first green retail bond opened on Thursday, opening at HK $99.95 $12.74 before breaking through the HK $100 offering price. Analysts said it was within expectations as the price was influenced by global bond markets.
The bond will have a tenor of three years. The investment threshold for a single lot of retail green bonds is HK $10,000. The minimum rate of 2.5 percent is required for bondholders to get interest every six months at a rate linked to inflation in Hong Kong.
With more than 488,000 valid applications, retail investors received an overwhelming response, with more than 190,000 people receiving five lots of green bonds.
The bond was listed amid stock market turmoil, with the Dow Jones Industrial Average in the US closing down more than 1,100 points and the Hong Kong stock market falling more than 500 points.
Wen Jiawei, a senior economist at Dah Sing Bank, said the government's forecast for this year's inflation is 2 percent or less. He believes that investors have a good chance of receiving a guaranteed dividend of 2.5 percent, which is more generous than the minimum 2 percent rate on similar inflation-linked bonds known as iBonds.
He expects the retail green bond to settle a little above the HK $100 level in the near term.
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With a guaranteed interest rate of 2.5 percent, the price of the green bond is not expected to fluctuate greatly, and investors are advised to use a wait- and- see approach and long-term outlook to earn fixed interest, said Christina Chan, a financial analyst at Futu Holdings Ltd.