International investors want to achieve fixed-income securities should definitely search for corporate bonds, recognized as one of the safest investments. As the yield associated with most of the fixed income securities declined consistently after recession and financial crises during the last few years, rate of interest obtained from corporate bonds has proved to be appealing for investors.
Along with this, corporate bonds offered by various countries across the Asian region, especially Hong Kong corporate bonds have pool of unique benefits, as discussed in the article. However, before you should know about corporate bonds available in Hong Kong, it is essential for you to stay aware with the bond market prevailing in Hong Kong.
Key Aspects of the Bond Market in Hong Kong
- Excellent Market Place for Both Investors and Issuers
Hong Kong has its liberal debt market, where international investors may easily make investments in their debt instruments. Because of this, bond market Hong Kong is a significant market place for both investors and issuers and in both foreign and domestic currencies.
- A Frequented International Bond Market of Asia
Based on varieties of product offerings, open access for investors and issuers, along with consistent increase in importance of offshore-based RMB bond issuances, Hong Kong has become a frequented international type of bond market in Asia.
Benefits to Invest in Corporate Bonds in Hong Kong
Based on key aspects related to the bond market Hong Kong, we should say that investment in corporate bonds would give you following prime benefits-
Liquidity
Most of the corporate bonds involve in trading in the secondary market, because of which investors get opportunity to sell and buy such securities after companies or receptive authorities issue them. On doing this, investors get benefits related to selling of bonds, which increase in price or buying of bonds post declining in their prices.
A few of the corporate bonds undergo thin trade. In this situation, participants i.e. issuers and investors seeking to sell such securities should stay aware that innumerable numbers of variables may affect the transaction. These include the bonds credit rate, rate of interests and size of individual bonds’ positions.
Varieties of Corporate Bonds Available
You will find varieties of Hong Kong corporate bonds, which include the following-
- Short-term corporate bonds, which have only 5years maturity or even less than that
- Medium-term bonds, which mature between 5years and 12years
- Long-term bonds with maturity exceeding 12years period
Provide You Different Coupon Structures
Along with maturity considerations, corporate bonds offer you variations in terms of coupon structures. Accordingly-
- Bonds Possessing Zero-Coupon Rate
Bonds possessing zero-coupon rate fails to give any payment of interest. Instead, government agencies and other companies issue such bonds at certain percentage of discounts to their individual values.
- Bonds Involving Fixed Coupon Rate
Bonds involving fixed coupon rate make payment of the same rate of interest until and unless they reach to the required maturity level and that too semiannual or annual basis.
To conclude, we should say that Hong Kong bond market is one of the best place to make money for international investors.
