Inflation-linked Retail Bond (“iBond”)
The inflation-linked retail bond, also known as iBond, is launched by the HKSAR Government under the retail bond issuance programme which is part of the Government Bond Programme.
More information on iBond is available on the website of the Government Bond Programme.
The issue circulars contain the final terms of all iBond Series of retail bonds and must be read in conjunction with HKSAR Government’s programme circular (as amended or supplemented from time to time) relating to the retail bond programme (the programme circular).
iBond Series - Issue Circulars
Retail Bond Issuance Programme - Programme Circular
Latest series
The latest iBond Series HK$15,000,000,000 Retail Bonds Due 2024 (Issue No.: 03GB2406R; Stock Code: 4246) (2024 iBond) has a minimum denomination of HK$10,000 and a term of three years. The semi-annual interest payments are linked to average annual inflation in Hong Kong, subject to a minimum interest rate of 2.00%. The principal amount will be repaid in full (i.e. 100%) by the HKSAR Government at maturity.
Investors who hold 2024 iBond through Hong Kong Securities Clearing Company Limited (HKSCC) directly or through their securities broker may trade 2024 iBond through SEHK.
Key Features of Secondary Trading Through SEHK
- Transparent on-screen prices
- Efficient auto-matching market
- Settlement certainty through HKSCC
All debt securities traded on SEHK are bought and sold at a “clean price”, meaning that the trade price is exclusive of accrued interest. As such, there will NOT be any price adjustment for debt securities after coupon payment.
When bonds are being traded in the secondary market, interest due from the last interest payment date to the settlement date, or in the case of a transaction that is settled before the first interest payment date, from the issue date to the settlement date, is normally paid to the bond seller from the bond buyer. The amount of interest to be paid is calculated in the same manner as an interest payment.
If the transaction is settled before the first interest payment date, the applicable per annum interest rate is the one announced by the HKSAR Government in advance. This rate is determined based on the higher of the Fixed Rate or relevant Floating Rate of the relevant bond. Please note that this is not the actual per annum interest rate for the first interest payment date.
If the transaction is settled after the first interest payment date, the per annum interest rate used in calculating the accrued interest will be that of the immediate preceding interest payment date.
The trading market data for 2024 iBond (Stock Code: 4246) can be found here.
Accrued interest involved in secondary trading of bonds can be found here.
Useful Website:
Updated 24 Jun 2021
Securities Broker Information
- Offer 2024 iBond subscription service and secondary trading of iBonds*
| Name of Exchange Participant | Contact Number | Contact Email | Company Website |
|---|---|---|---|
| Averest Capital Limited | (852) 2155 6020 | cs@averestcapital.com | http://www.averestcapital.com |
| BMI Securities Limited | (852) 3575 1300 | enquiry@bmisonline.com | http://www.bmisonline.com |
| Bright Smart Securities International (H.K.) Limited | (852) 2537 1371 | online@bsgroup.com.hk | http://www.bsgroup.com.hk |
| Chief Securities Limited | (852) 2500 9116 | thomas@chiefgroup.com.hk | http://www.chiefgroup.com.hk |
| Gong Ping Securities Limited | (852) 3161 2401 | cs@gongpinggroup.com | http://www.gongpinggroup.com |
| Haitong International Securities Company Limited | (852) 3583 3388 | group@htisec.com | http://www.htisec.com |
| Innovax Securities Limited | (852) 2311 0287 | settlement@innovax.hk | http://www.innovax.hk |
| Monex Boom Securities (H.K.) Limited | (852) 2255 8888 | service@boomhq.com | http://www.boom.com/en/ |
| Monmonkey Group Securities Limited | (852) 2111 0110 | cs@monmonkeygroup.com | http://monmonkeygroup.com |
| Partners Capital Securities Limited | (852) 2157 5400 | cs@partnerscap.com | http://www.partnersfh.com/sec/tc/index.html |
| Prudential Brokerage Limited | (852) 2143 3808 | info@pru.com.hk | http://www.pru.hk |
| Regan International Securities Limited | (852) 3700 5682 | cs@regan.com.hk | http://www.regansec.com |
| Safe Gold Securities and Futures Limited | (852) 3678 2920 | cs@safegoldsf.com | http://www.safegoldsf.com |
| uSmart Securities Limited | (852) 3018 4526 | cs@usmarthk.com | https://usmartsecurities.com |
| Wealth Link Securities Limited | (852) 3187 7700 | patrick.yip@wealthlink.com.hk | http://www.wealthlink.com.hk |
*voluntary disclosure via responses to a SEHK circular published on 1 Jun 2021
Updated 10 Jun 2021
Market Data
Updated 24 Jun 2021
Exchange Circular
Exchange Participants Providing Service for Inflation-Linked Retail Bonds (“iBond”)
For iBond series Due 2024:
Updated 03 Jun 2021
Data of Previous Issuance
| Year of issuance | Listing date | Turnover on listing date (HKD mn) | Closing price on listing date (HKD) | % increase from face value as of end of first trading day |
|---|---|---|---|---|
| 2011 | 29 Jul 2011 | 159 | 106.70 | 6.70% |
| 2012 | 25 Jun 2012 | 708 | 105.00 | 5.00% |
| 2013 | 25 Jun 2013 | 1091 | 103.15 | 3.15% |
| 2014 | 12 Aug 2014 | 1548 | 105.15 | 5.15% |
| 2015 | 10 Aug 2015 | 1772 | 105.50 | 5.50% |
| 2016 | 21 Jun 2016 | 1804 | 103.35 | 3.35% |
| 2020 | 17 Nov 2020 | 946 | 102.75 | 2.75% |
| 2021 | 24 Jun 2021 | 3240 | 103.20 | 3.20% |
Updated 24 Jun 2021
Given the comprehensive list of financial terms and topics you've provided, let's delve into each one to ensure clarity and understanding.
Securities
Securities are financial instruments that represent an ownership position in a publicly-traded corporation (through stocks), a creditor relationship with a governmental body or a corporation (through bonds), or rights to ownership as represented by an option.
Debt Securities
Debt securities, often referred to simply as bonds, represent a loan made by an investor to the issuer. In return, the issuer promises to pay interest periodically and return the principal amount at maturity.
Equities
Equities represent ownership in a company and come in the form of stocks. When you own stock in a company, you have a claim on part of the company’s assets and earnings.
Equity Warrants
Equity warrants give the holder the right, but not the obligation, to buy shares of a company at a certain price before expiration.
Exchange-Traded Products (ETPs)
ETPs are a type of security that tracks an underlying benchmark or index and trades on a stock exchange. They include exchange-traded funds (ETFs), exchange-traded notes (ETNs), and other similar products.
Investors
Investors are individuals or institutions that allocate capital with the expectation of receiving a return on their investment.
ETF Tax Calculator
This tool helps investors calculate the potential tax implications of investing in ETFs, taking into account factors like capital gains, dividends, and distributions.
Issuers
Issuers are entities that offer securities for sale to the public. This could be corporations, governments, or other organizations.
Market Makers
Market makers are firms or individuals who continuously buy and sell securities to provide liquidity to the market. They do so by quoting both a buy and sell price for a financial instrument.
Structured Products
Structured products are complex financial instruments created to meet specific needs that cannot be met from standard financial products. They combine traditional securities, such as bonds or equities, with derivatives to offer tailored investment strategies.
Derivative Warrants
Derivative warrants give investors the right, but not the obligation, to buy or sell an underlying asset at a specific price before a certain date.
Callable Bull Bear Contracts
These are structured products that provide investors with exposure to the performance of an underlying asset. They can be called or terminated under specific conditions.
Inline Warrants
Inline warrants are a type of structured product that allows investors to earn a return if the price of an underlying asset remains within a certain range.
Real Estate Investment Trusts (REITs)
REITs are companies that own, operate, or finance income-generating real estate. They offer investors an opportunity to invest in portfolios of large-scale properties without having to buy or manage the properties themselves.
iBond
The iBond, or inflation-linked retail bond, is issued by the HKSAR Government and offers semi-annual interest payments linked to the average annual inflation rate in Hong Kong.
Trading and Settlement
When trading bonds in the secondary market, they are bought and sold at a clean price, which excludes accrued interest. The accrued interest is calculated based on the period between the last interest payment date and the settlement date.
Securities Brokers
Securities brokers facilitate the buying and selling of securities on behalf of clients. They provide trading platforms, research, and advisory services to help investors make informed decisions.
HKSCC and SEHK
The Hong Kong Securities Clearing Company Limited (HKSCC) provides clearing and settlement services for securities traded on the Stock Exchange of Hong Kong (SEHK).
Conclusion
Understanding these terms and concepts is essential for anyone interested in the financial markets, whether you're an individual investor, a financial advisor, or a seasoned trader. Each term plays a crucial role in shaping the investment landscape and provides various opportunities and strategies for investors to consider.
