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Written by: Zhang Meihua
2020-03-08 14:19
Last updated: 2020-03-08 14:19The Financial Secretary, Chen Maobo, recently announced the latest Budget. The public is generally concerned about the government's plan to send cash and various measures to relieve the plight of the people. The Secretary for Financial Affairs and the Treasury, Lau Yi Cheung, published a blog today (8), stating that the budget also proposed a number of measures for Hong Kong's financial services industry, including plans to issue iBonds and silver bonds again this year. It is estimated that the total issuance of the two bonds will be no less than 13 billion Hong Kong dollars, and at the same time, the scope of stamp duty relief will be expanded.
▼ "Budget 2020" measures ▼
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Under the attack of coronavirus disease in 2019, all walks of life and the general public have been affected to varying degrees. The government is striving for various measures to be launched as soon as possible to benefit the citizens as soon as possible. In terms of the bond market, the Hong Kong bond market continues to develop, and the total bond issuance ranks third in Asia except Japan. Last year, Hong Kong successfully sold $ 1 billion worth of green bonds under the "Government Green Bond Scheme". The bonds were subscribed by more than 100 international institutional investors, with a subscription amount of more than $ 4 billion, which is more than 4 times the amount of the issue. In response to market conditions, a total of approximately 66 billion Hong Kong dollars will be issued, which will strengthen Hong Kong's position as the region's premier green financial hub.
In the retail bond market, the government plans to issue inflation-linked bonds (iBond) and silver bonds again this year. It is estimated that the total issuance of the two bonds will be no less than HK $ 13 billion, including approximately HK $ 10 billion iBond and 30 Billion Hong Kong dollar silver bonds. Liu Yixiang pointed out that looking back at past experience, the government's past issuance of iBond and silver bonds has also responded well. The current global low interest rate environment is expected to continue for some time, and the US Federal Reserve suddenly announced a half-cent cut on Tuesday. The iBond we will launch will target local residents to alleviate the impact of inflation. And silver bonds will provide stable returns for senior investors. These two measures will promote the further development of the Hong Kong retail bond market.
▼ Four pictures to see the fiscal 2020 tax rebate measures ▼
As for the asset management business, Liu Yixiang said that the budget proposes two tax arrangements, in addition to waiving the stamp duty on stock trading involved in the issuance and redemption of market-traded funds (ETF) units listed on the Hong Kong Stock Exchange. Carry interest issued by private equity funds operating in Hong Kong and meeting certain conditions provides tax relief.
Liu Yixiang pointed out that the government has also proposed to expand the scope of stamp duty relief, covering stamp levies on stock transactions involved in the process of market makers participating in the issuance and redemption of ETF units listed in Hong Kong. They believe that the measures can reduce the operating costs of ETF market makers, thereby Reduce the ETF trading spread and reduce the overall cost of ETF trading. The measures can provide incentives for ETF issuers to attract them to issue ETFs that track Hong Kong stocks in Hong Kong and strengthen the depth and liquidity of the Hong Kong securities market.
▼ 30 billion measures for epidemic prevention and anti-epidemic funds ▼
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Finally, Liu Yixiang stated that in order to attract more private equity funds to operate in Hong Kong and promote Hong Kong's development as a comprehensive fund service center, he is planning to provide tax relief for the incidental rights issued by private equity funds operating in Hong Kong under certain conditions. The measures are aimed at attracting private equity funds to choose to operate in Hong Kong, and driving surrounding industries, such as legal consultants, tax consultants, financial consultants, auditing, company secretaries, etc., to create high value-added employment opportunities. Liu Yixiang emphasized that fierce competition in major financial centers around the world and the government will actively promote market development while adhering to financial supervision.
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