Hong Kong seeks to raise bond issuance ceiling to HK$900 billion A proposed increase in the Hong Kong government’s borrowing cap for its bond programmes to HK$900 billion (US$115 billion) will be sufficient to finance infrastructure projects over the next three years, officials have said, while leaving the door open to further rises in the long run if needed. Andrew Lai Chi-wah, permanent secretary for financial services and the treasury, made the remarks on Thursday during a Legislative Council subcommittee meeting scrutinising the plan to lift the government’s bond issuance ceiling. Financial Secretary Paul Chan Mo-po proposed raising the borrowing ceilings of the Government Sustainable Bond Programme and the Infrastructure Bond Programme from HK$700 billion to HK$900 billion in his annual budget in February, citing the need to fund infrastructure development, including the Northern Metropolis megaproject. Lai said the new limit would be adequate to support short- to medium-term initiatives after lawmaker Robert Lee Wai-Wang expressed concerns over whether the government would further raise the ceiling. “Over the next two to three years, unless there are significant and unforeseen events, [the borrowing cap] is sufficient to meet our needs,” Lai said. However, he did not rule out further increasing the cap to accommodate new projects emerging in the Northern Metropolis and the need to expedite its development. Lai noted that even after the increase, Hong Kong’s debt-to-gross domestic product level would stand at 19.9 per cent, which he described as healthy and lower than that of other developed economies. He said it was premature to set a “red line” or ultimate cap at this stage. Meanwhile, Lai stressed the importance of funding infrastructure development by bond issuance to maintain government reserves amid escalating geopolitical tensions. “In light of the rapidly changing global situation, we continuously conduct internal assessments,” Lai said. “We have prepared contingency plans for potential black swan events.” Kenneth Hui Wai-chi, external executive director of the Monetary Authority, said the government’s bond issuance would continue to focus on renminbi and Hong Kong dollars, with each expected to account for about 40 per cent of the total. Hui added that the authorities planned to issue more long-term bonds. Lawmaker Albert Chuang Ka-pun proposed expanding the issuance of retail bonds but Lai pointed to their relatively high interest rates, which would drive up costs. The government would prioritise issuing silver bonds, which target elderly residents, he added. Lawmaker Carmen Kan Wai-mun urged the government to improve transparency by reporting more frequently to the legislature on how bond proceeds were used. Lai pledged to consider issuing a half-yearly mid-term report in addition to the current annual report. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3349561/hong-kong-seeks-raise-bond-issuance-ceiling-hk900-billion?pgtype=live (ICE HONG KONG)

Fonte notizia: South China Morning Post