Letters | Lai See Bonds anyone? Here’s how Hong Kong could raise billions
- Readers propose a possible new source of funding for the government, and suggest how cities in the Greater Bay Area could cooperate to boost the nighttime economy
Perhaps it could consider a new type of bond, which could be called “Lai See Bonds”. The idea comes from UK Premium Bonds, treasury-backed paper with a twist: rather than offering a fixed coupon rate, returns are subject to a monthly lottery where every £1 bond stands a chance to win anything from a £25 prize to a £1 million jackpot.
When Hongkongers buy Lai See Bonds, they would be investing, not gambling, as their investment would be protected and can be returned in full at any time, similar to UK Premium Bonds. Unlike traditional bonds, Lai See Bonds would offer greater flexibility; with no maturity date, investors would able to subscribe and redeem at any time, say, by giving 30 days’ notice of withdrawal.
The government could offer these Lai See Bonds with a monthly or even weekly lottery, offering smaller prizes of, say, HK$10,000-HK$100,000 and major prizes of up to HK$1 million – making them just as exciting as the Mark Six lottery, if not more. The difference being that you would pay just once to enter the Lai See “lottery” and qualify for endless draws – and can still get your stake back.
Such a bond issue, assuming a good take-up rate, could be a significant and alternative source of funds for the government. Given the improbability of a collective redemption, the government should safely be able to invest most of the money raised, leaving a minority for short-term working capital purposes.
Assuming the government can secure an annual investment return of 5 per cent, 1 per cent can be set aside for Lai See Bond winnings, leaving 4 per cent for the government, less running expenses. So, there would be a very low cost of funds plus a feel-good factor for investors.
In the UK, over 21 million people subscribe to Premium Bonds – roughly a third of the population – with over £123 billion invested as of March 2023. A third of Hong Kong’s population is around 2.5 million people; if they each bought just HK$50,000 of Lai See Bonds, the government would have raised HK$125 billion – 4 per cent of which would be HK$5 billion.
Given Hongkongers’ propensity for both saving and having a flutter, demand for Lai See Bonds can be meaningful. If the idea proves successful, the government could cooperate with other cities in the Greater Bay Area to expand the scheme.
Karl Hurst, Repulse Bay
Greater Bay Area collaboration could boost night economy
In order to boost the economy by spurring domestic demand, the central government has been encouraging cities to promote the nighttime economy to encourage consumption at night in addition to during the day. While various cities across China have taken their own measures individually, why not collaborate with neighbouring cities to improve regional development, increasing the pie for everyone?
Hong Kong has launched the Day x Night Vibes @18 Districts initiative, and other Greater Bay Area cities such as Shenzhen and Guangzhou have done a good job of promoting the nighttime economy. With cross-border transport being more convenient, it is not unrealistic to build a cross-city and cross-border 24-hour living circle in the area.
By collaborating, the cities can gain synergies. For example, they could promote each other’s activities, avoiding a clash of dates when holding mega events, and offer discounts and benefits to those who take part in events in two or more cities in a certain period of time.
Of course, transport and customs convenience is key to success. In addition to the ever-improving transport network across the Greater Bay Area, extending customs clearance time to 24 hours at more checkpoints between Hong Kong and Shenzhen would be necessary.
Angus S.K. Chan, Ma On Shan
