[Bond Investment Guide] How to Buy Bonds in Hong Kong?
【Infrastructure Bond 2024】Guaranteed return of 3.5 cm! How to get up to “11 free” subscription?
What are Government Infrastructure Bonds
The Infrastructure Bond (Infrastructure Debt) is a new scheme proposed by the Government of Hong Kong in the 2023 2024 Budget to address the construction of infrastructure. The funds raised will go to the Government's Basic Engineering Reserve Fund to support a variety of major infrastructure projects, including port and airport developments, buildings, drainage, civil engineering, roads, and the development of new towns and cities.
The Government Infrastructure Bonds will be available for subscription to Hong Kong residents from 26 November with a target issue of HK$20 - 25 billion, HK$0.01 million per hand, for a period of 3 years, paying interest once every six months. The interest rate will be linked to local inflation, guaranteeing an annual interest rate of not less than 3.5 percentage points.
Government Infrastructure Bond Information and Timetable
Subscription Period | 26 November to 6 December |
Listing Date | 18 December |
Subscription Eligibility | Holds a valid Hong Kong identity card |
Guaranteed Rate of Return | 3.5 cm |
Year Period | 3 years |
Dividends | Once every six months |
per hand | 0.01 million HKD |
Target Issuance | 200 -25 billion HKD |
Interest Determination Mechanism
Interest will be paid once on each payment date, i.e. the end of every 6 months. The applicable annual interest rate on that payment date will be determined and published on the relevant interest rate determination date.
The relevant annual interest will be determined and published on the date of interest determination as the following higher: -
floating rate, that is, on the date of the determination of the relevant interest rate, in accordance with the aggregated CPI compiled and published by the Statistics Department of the then HKSAR Government based on the results of the latest Household Expenditure Survey (accurate to two decimal points);
Fixed rate, 3.5 cm
Interest = Annual Interest × Amount of Bonds Hold× Number of Days of the Half Year/365
How to buy bonds through Futu
Futubull APP > Market Share > Hong Kong Stock > New Share Centre finds the infrastructure to build retail bonds and buy them.
Note: Applicants purchased through Futu have a Futu Securities account.
The underlying retail bonds purchased through Futu Securities cannot be repaid ahead of time, but can only be sold through the second-tier market or maturity. Click here for the latest quote of Infrastructure Retail Bond (04286.HK)
Infrastructure Bond 2024 Lazy Bundle
Q1 What are the benefits of buying infrastructure retail bonds in Futu?
Futu offers free offers for up to 11 items. The deductible fee includes: purchase renewal fee, application renewal fee, hard disk trading gold, hard disk trading platform usage fee, listing transaction fee (applicable to one year free person), trust fee, transfer fee, commission fee, inactivity fee, storage fee, and term return fee.
Q2 How can I purchase Infrastructure Retail Bonds by Futu?
Provide a common method of purchasing through Futu Securities. Customers can purchase using cash, cash+Futui Finance or FutuFinance. Futui Finance includes the amount of non-cash on the account and the holding of stock exchange.
Q3 Will there be a profit when using Futu Finance to participate and purchase?
The use of Futu Financing will not generate financial capital when participating and purchasing. After the expiry of the payment, the deposit can be credited to the current account regardless of the purchase amount, will use the Futu Finance on the day of the deposit and generate FutuFinancial Income. These percentages are based on the financial account month, the HKD direct interest rate and the HKD equity account rate (usually 6.8% per annum. In fact, please refer to the page as well as the reference list, and borrow from time to time. The deposit will not be profitable at the same time as a supplement to the required amount of the purchase.
Q4. Where do I subscribe for Infrastructure Retail Bonds?
Once you have started buying, you can go to Futubull APP > Market Cap > Hong Kong Stock > New Share Centre to find the underlying retail bonds and proceed with the purchase. Note: Applicants purchased through Futu have a Futu Securities account.
Q5 When will Futu start purchasing new Infrastructure Retail Bonds? When will my account be debited?
Regarding the purchase of the retail bonds for this infrastructure, Futu's open call period is limited to: 10:30 a.m. on November 26, 2024, at 10:30 a.m., December 12, 2024. Futu General has approved a multiple-issuance strategy, in which all applications to tender before 09:00 on the previous day of purchase will commence at 09:00 Applications submitted in the period 09:00-10:30 will be deducted from 10:30 a.m.
All subscription applications can only be modified or revoked before the start of the debit.
Q6. Where do I go to see the tab results?
The IPO, purchase and distribution results are expected to be released before December 17. You can check the purchase results by going to Futubull APP-Market, New Share Centre-Acquisition Record.
Q7. I have a currency fund, can I subscribe immediately?
Once you click the Redeem button on the Fund Holders page, you can subscribe to Infrastructure Retail Bonds immediately. If you have activated the automatic redemption function of the currency fund, you can subscribe immediately without clicking the “Redeem” button, and the system will help you to redeem it automatically.
Q8 Can Infrastructure Retail Bonds be traded on the open market? What is the trading time?
Yes, the infrastructure cache time is: 16:15 ~ 18:30 on December 17, 2024.
Q9 What is the issuance period for Infrastructure Retail Bonds?
3 years, every 6 months
Q10 What is the interest rate on infrastructure retail bonds?
Guaranteed annual interest rate of 3.5%, paid at the end of every 6 months. Infrastructure Retail Bonds will be sold at 100% of the principal amount of the bond, so the interest rate at issue should be equal to the bond yield. The annual interest rate uses a constant rate (3.5%) and a floating rate (linked to inflation) as the actual interest rate.
Q11 How do Infrastructure Retail Bonds yield?
Infrastructure Retail Bonds Multiply the amount of the interest payable on any bond at any interest period multiplied by the principal amount of the bond, multiply the percentage by the actual days that the interest period has passed and divide by 365 days (the semicircle is rounded to 2 decimal places). THE ACTUAL NUMBER OF INTEREST DAYS IS: EACH FROM THE DATE OF ISSUE OR ANY DIVIDEND DATE (INCLUDING THAT DAY) TO THE NEXT PAYMENT DATE (EXCLUDING THAT DATE). For example: If you hold a 1-hand Infrastructure Retail Bond at an annual interest rate of 3.5%, the interest is calculated as: 3.5% * 10000* 182/365 (including the same date) in the first interest cycle: 3.5% * 10000* 182/365 (rounded to 2 decimal places), Interest can be obtained in the end HK$174.52
Q12 What are the distribution rules for Infrastructure Retail Bonds?
Infrastructure retail bond allocation mechanism to meet the application of small investors as much as possible. The target for this Infrastructure Retail Bond issue is HK$20 billion.
Scenario 1 | The total amount of valid applications is not more than HK$20 billion | 100% Eligible Applicants |
Scenario 2 | More than 2 million valid applications | Bonds will be issued by lot and each signatory will receive a bond (i.e. HK$0.01 million) |
Scenario 3 | The number of valid applications is less than 2 million copies, but the total number of valid applications is more than HK$20 billion | Circular distribution of bonds shall be arranged in accordance with the following arrangements: 1. First hand (i.e. HK$0.01 million) Bonds issued to all eligible applicants first hand 2. Issuance of second-hand bonds to investors applying for two or more hands if the remaining hand is permitted 3. If the remaining hand is allowed, third party bonds will be issued to investors applying for three or more hands 4. In this way, until the number of remaining hands is insufficient to make another distribution cycle, the remaining number will be distributed as a draw |
*To be fair, all repeat applications are not accepted. Investors can only apply through a dealer bank or securities broker.
Q13 What qualifications do I need to subscribe to Infrastructure Retail Bonds?
Individual investors holding a valid Hong Kong Identity Card can subscribe. Each person may submit only one application for the bond. All duplicate applications will not be accepted and all applications will be considered invalid. * Non-permanent resident Hong Kong customers holding a Hong Kong Identity Card may also participate in Infrastructure Retail Bond Subscription. * Cannot be subscribed for by Americans and Canadians
Q14 Are Infrastructure Retail Bonds subject to early redemption?
The underlying retail bonds purchased through Futu Securities cannot be repaid ahead of time, but can only be sold through the second-tier market or maturity.
The above FAQ is for reference only, Futu has no legal liability for this contract. You may refer to it at any timeRelease Information.
