Paul Chan: New IBonds To Guarantee Better Returns

The Financial Secretary, Paul Chan, said the government will soon issue a new round of inflation-linked iBonds at a more attractive guaranteed rate of return for investors.

Chan said the new iBonds would pay a minimum of two percent – which he described as an attractive return, considering that global interest rates were expected to remain low for a long time, and there were inflation risks posed by monetary-easing policies in overseas markets.

The iBond was first introduced in 2011 and issuance continued until 2016. The three-year bonds paid dividends every six months linked to the rate of inflation, with a minimum of one percent.

Writing on his blog on Sunday, Chan said even if inflation rose, the dividend would match the inflation rate.

The financial chief added that after the iBonds issue, the government would release its Silver Bond, targeting people aged 65 and above.

Each bond series is worth HK$13 billion, and the government said it would issue more if demand is strong.