A general manager of Bank of China (Hong Kong) said the total subscription value for the newly released silver bonds could reach a record high.

The remarks came after the government's 11th batch of silver bonds for senior citizens went on sale from 9am on Friday morning.

The sale, totalling up to HK$55 billion, ends at 2pm on September 4.

The three-year bonds would enjoy a guaranteed annual coupon of 4.25 percent, below the record five percent in 2023 but higher than the 3.85 percent for the batch last year.

Speaking to reporters, Arnold Chow, general manager of the lender's personal banking product department, said he believes the bonds will be welcomed by investors – given their stability and "fairly attractive" interest rate floor.

He also noted that the guaranteed rate of 4.25 percent is notably higher compared with the average two to three percent rates offered by local lenders' fixed-deposit products.

"With the global landscape remaining unstable, it will weigh on the global economy, company profits, inflation, and even unemployment rate – all these factors will cause instability," he said.

"So amid the relatively unstable environment across the global asset allocation market, I believe there is customer demand for these types of stable products.

"We expect there'll be over 300,000 people subscribing to the bonds this time, and there's an opportunity that the total value [could reach] a new record," he added.

Bank of China (Hong Kong) is one of the participating banks.

Each eligible investor, born in 1967 or earlier holding a valid Hong Kong identity card, will be allowed to subscribe for up to 100 board lots, with each lot costing HK$10,000.

The bonds are expected to be issued on September 15, right before the US Federal Reserve is due to announce its next interest rate decision. The markets have widely anticipated a rate hike later this year.

Chow added that customers need not be concerned by the upcoming policy rate changes as the current yield curve has already priced in expectations of those potential movements, with interest set to be paid every six months.

The previous batch released last year saw over 370,000 applications and a total value of HK$98.2 billion, both record figures.


Edited by Aaron Tam