Budget Speech

Promoting Further Development of the Bond Market

49.      Promoting the development of the bond market is important to reinforcing Hong Kong's position as an international financial centre. This can provide more diversified investment products and avenues for financing to attract more overseas capital, enhancing stability of our financial system. The Government has been working on this. Apart from providing the necessary financial infrastructure and relevant tax incentives, we have offered investors more choices through issuing different types of bonds. To promote the further and sustainable development of our bond market, we intend to implement a programme to issue government bonds.

50.      I would like to emphasise that the aim of the government bond programme is to promote the further development of our bond market and to provide more choices to both institutional and individual investors. In view of the current investment market conditions and low interest rates, we believe that there is demand for quality bonds. The sums raised will be credited to a fund to be established under the Public Finance Ordinance. The fund will not be treated as part of the fiscal reserves and will be managed separately. We will seek the views of the trade on details of the bond programme later and make necessary adjustments at the implementation stage having regard to market needs. We will put forward to the Legislative Council as soon as possible the resolutions for issuing bonds under the programme and for establishing the fund. We will also examine, in consultation with relevant sectors, whether there is room for further improvement in the existing financial infrastructure and mechanisms, so as to promote the development of bond products.