[Bond Investment Guide] How to Buy Bonds in Hong Kong?
【Bonds Investment Guide How to Buy Bonds in Hong Kong?
“Are Bonds Right for Me? What are the investment methods of Bonds and Stocks? How to Invest in Bonds” If you are calculating Investment Bonds and you will be asked about various questions in the Center, this article will give you a quick understanding of the basics of bonds and help you quickly get into the door to investing in bonds.
What are Bonds?
Bonds are a type of bond tool issued for the purpose of pooling funds. Institutions that issue bonds are usually governments or corporations. In other words, investment bonds are related to governments or corporations that issue loans. After the Investors Buy Bonds, After Debt Issuance, the Institutions of the Borrowing Institutions are required to sign the Contracts, to pay the amount of the Bonds at the time of payment of the Bonds, and the Contractor shall pay the amount of money on the notes due at the time of the advance due date, and the Contractor shall pay the amount of money on the invoice due date. Fixed interest payments to the holders of the Bonds in advance.
The biggest feature of Bonds is that they have a return on payment, which means that they are called Fixed Income Assets.
Advantages of investing in bonds
Stable earnings
Stocks that dip at a high yield, regardless of the chosen symbol or time of trade, can create losses. Any listed company will not guarantee the bonds, and if the bonds have a due date, the issuer must repurchase the money and pay a fixed interest.
More protection
A Company shall be liquidated due to Operational Matters, and the Bondholder of the Bonds shall receive a portion of its own invested funds from the Listed Assets and shall be entitled to greater protection in respect of the Shareholders. It is important to note that if the company is not already in debt, the debtor's funds may not be fully secured.
Relation to Bonds and Stocks
Survey data (Data Source: The Discreet Charm of Fixed Income, PIMCO) showed that between 1933 and 2020, the relationship between 1933 and 2020 was unchanged for the most part of the US Stocks and Bonds, although the relevance was below 0 for most of the time since 2000. It makes sense that, at a time when the stock market's consolidation ratio is at a low level, the overall yield ratio of the bond market is on an upward trend.
If Stocks and Bonds continue to be related, investing in these two types at the same time will benefit more from the balance of income on the Account Assets.
Risks of investing in bonds
Stocks that are invested become Shareholders of listed companies are required to bear the risk of falling stock prices due to company or market-based reasons. Bondholders will become creditors of governments or corporations, while the greatest risk is the risk of delinquency, that is, the risk that Debt Institutions cannot accept the cash and the payment of interest on a long-term basis. Since the credit of these Debt Institutions is extremely important, investors should choose highly creditworthy institutions.
There are 6 important factors to consider when investing in bonds
Debt Institutions: What are the means of borrowing by the countries/regional governments and companies that issue bonds”
Bond Equities (Capital): The value of the bonds in terms of price refers to what Institutions owe to the holders of the bonds in time, simply explaining how to borrow more money”
Due date: Valid bonds before the date, Bonds without a due date are perpetual bonds”
Ticket Ratio: Rate of Interest (YoY) that Debt Institutions intend to pay interest to Bondholders
Listing Date/Frequency: Date or frequency specified by Debt Institutions (annual/semi-year/month/month)
Price of Bonds: The cost of buying Bonds requires attention, the cost of Bonds needs to be paid attention, the price of Bonds will depend on the interest rate, will not be the same as in value, there may be a price drop or discount.
How to Calculate Interest on Bonds?
How to calculate the duration of holding Bonds so that you can get more profit each term? The calculation formula is as follows:
Monthly bid = Rate ÷ Frequency x Value of Bonds
As an example, it is recommended to buy bonds issued by an ABC company with a value of $10,000, issued once every six months, at a rate of 5%, for a period of 5 years, with an issue price equal to the same value. After 5 years of testing, when the Bonds are due, can the AGM yield more interest?
The answer is: (5% ÷ 2) x 10000 x 10 = 2500
Bonds are issued twice a year, a 5-year joint party 10 times, and the bond can be reduced to $250 per term (every six months). Due to this, Aram can make a profit of 2500 USD over the period of time. After the maturity of the bonds, the Debt Institutions are obliged to repay the bonds, so the total amount can be reduced to USD 12,500 after holding the bonds for 5 years.
What are the types of Bonds?
According to the date of the bonds, the issuer and the credit rating, they can be divided into the following categories:
By Expiration Date:
Divided into long-term debt or short-term debt. Short-term bonds usually have a higher degree of risk, the higher the accuracy, and the correspondingly lower the interest rate.
By Debtor:
Separate into government or corporate debt. Generally, government debt is more secure than corporate debt, such as countries or regions with good economic conditions and high expansion plans, such as the United States. Some third-party rated Institutions carry out debt capacity assessments against different countries/regional governments and different segments of enterprises, and the safety of bonds issued by similarly high ranking institutions.
Rating by risk:
Divided into investment-grade debt or high-yield debt (Scam Bonds). According to Moody's, Standard & Poor's rating, BBB or higher and Baa or higher, referred to as Investment Grade Bonds, usually with respect to safety, the interest rate is referred to as High Yield Bonds or Fraudulent Bonds with respect to Prohibited Risk High, interest rates are high.
How do investors in Hong Kong invest in bonds?
In the words of investors in Hong Kong, the choice of Bonds is not worth more than Toyota Stocks, but may fundamentally satisfy investment needs. Most Hong Kong bond investors prefer to opt for highly risk-rated bonds, such as government bonds and US bonds.
Common Government Bonds are divided into two types of Listed and Non-Listed Bonds, which are divided into: Listed Bonds can be bought without purchase, they can be sold on the Exchange, and the Trading Method of Stocks, but Non-Listed Bonds can only be purchased through a designated Bank or Broker.
Binding Bonds (iBonds)
iBonds are public bonds issued by the Hong Kong Government to all Hong Kong residents. For example, iBonds issued in 2021 are subject to a minimum of HK$10,000 for a period of 3 years, with a frequency of every 6 months at a rate of at least 2% per year, and can be bought and sold on the Exchange.
Silver Bonds
Silver BondsSenior bonds issued by the Government of Hong Kong for the first time in 2016, providing safe and low-risk investment options for long-term Hong Kong residents. For example, bank bonds issued in 2023 may be purchased for a minimum amount of HK$10,000 for a period of 3 years, with a minimum payment of up to 60 years or above once every 6 months. Bank bonds are not supported by purchases on the Exchange and can be returned at any time by the Government.
In 2025, the Hong Kong Government announced that it will launch a new batch of Treasury bonds and will begin to subscribe recently. For details, please refer toGovernment Announcement。 The distribution and distribution information in the past years is as follows:
Government Sustainability Bonds (Green Bonds)
Government Sustainability Bonds (known as Green Bonds), The main objective of the Hong Kong Government is to coordinate the green projects in accordance with the requirements of pooling funds. The Bonds for the first public sale in 2022, such as the Green Bonds issued in 2023, are available for sale on the Exchange for a minimum of HK$10,000 for a period of 3 years, with a frequency of every 6 months, at a rate of at least 4.75% per year. All private investors holding a valid Hong Kong identity card are eligible to purchase.
KibyeonBonds
Infrastructure Bonds (Simplified Underlying Bonds)It is a new scheme launched by the Hong Kong Government in the 2023 2024 budget to support the development of infrastructure facilities. Through the issuance of these Consortium Bonds, the funds will go into the Government's Basic Engineering Reserve Funds to support a variety of major infrastructure projects, including port and airport expansions, buildings, civil engineering, roads, and the development of new districts and districts.
Starting on 26 November 2024, Government Infrastructure Bonds will be open for purchase by Hong Kong residents, with a target issuance of between HK$200 billion and HK$25 billion. Bonds are valued at HK$0.01 million for a period of 3 years, with a one-time payment of interest every six months. The interest rate will be adjusted according to local circulation, with a minimum interest guarantee of 3.5cm per year.
Retail Conduit Bonds
Retail Conduit Bonds(Mechanic Pipeline) shall be issued by the Hong Kong Airport Management Board to fund airport development schemes, infrastructure improvements or other operations-related costs. (The Hong Kong Airport Management Agency is a Statutory Institution of the Government of Hong Kong, responsible for the operation and management of Hong Kong International Airport)
For example, ICTY Bonds issued in 2024, with a minimum amount of HK$10,000, for a period of 2.5 years, issued once every 3 months, at a rate of 4.25% per annum, can be bought on the Exchange, and on average all investors with HKID cards are eligible for purchase.
U.S. Treasury Bond
As the name implies,U.S. TreasuryBonds issued by the United States Government are available for trading by Global Institutions and Individual Investors. Typically rated by Institutions as the highest credit rating, US Treasury Bonds are one of the best floating bonds in the world and are recognized as one of the safest Assets.
U.S. Treasury debt is divided into three categories: short term (within 1 year), medium (within 10 years), and long term (10 years or more), and different U.S. debt rates for different years and maturity dates.
How to buy US Treasury bonds?
In the Futubull app, you can find US bonds in a simple step.Investing in US debt through Futu, Entry threshold starts at $1000.
Click on the Finance tab and select “Bonds”
Go to the “Bonds” page, you can view the Bonds in different categories on the homepage
Click on US Bonds - To see a list of bonds supporting Futures Trade Click on the Filter selector in the upper left corner to filter the bonds by criteria
Click on Instrument Bonds to see the latest Buy and Sell Quotes and Historical Movements
Don't want to buy Bonds directly? You can choose to invest in ETFs in bonds
With the exception of Buying Bonds directly, investors can invest in bonds via ETFs, and investors can invest in bonds via ETFs.
In relative terms,Bonds ETFThe greatest advantage is that investors can opt for instrument bonds and directly own a basket of bonds at a lower cost to achieve the goal of diversifying the investment.
However, bonds and ETFs are essentially two completely different types of Trade: bonds are fixed-term and ETFs have no term limits. Institutions that manage ETFs will replace Old Notes in Hold Positions with Newly Issued Notes on a regular basis.
