Exchange fund notes good option for investors: HK official

The re-launch of the retail Exchange Fund Note program, which starts with an issue of 300 million HK dollars (38.46 million US dollars) in two-year notes onMay 17, offers a good choice for retail investors, Hong Kong Monetary Authority chief Joseph Yam said on Thursday.

The minimum investment size is 50,000 HK dollars (6,410 US dollars) and the subscription deadline is May 11, according to themonetary authority.

In his Viewpoint column issued on the authority's website on Thursday, Yam noted a pilot scheme was launched in 2003-04 to facilitate retail participation in the Exchange Fund Notes program,as part of the efforts to widen the investor base in bonds.

A total of 330 million two-year and three-year notes were sold to retail investors under the scheme.

Yam believed that the note is a good alternative investment option for retail investors.

Yam said the note is a secure investment of high credit quality,as it is issued by the Hong Kong government for the account of theExchange Fund.

He added that the note is the most liquid instrument among all Hong Kong dollar bonds in the secondary market. The turnover averages 36 billion HK dollars (4.61 billion US dollars) a month. It is relatively easy for investors to buy and sell notes in the secondary market.

Yam continued that the pricing of notes is highly transparent. Investors can readily check out the reference prices available daily on the authority's website, Reuters and other electronic media and newspapers.

Source: Xinhua