Finance ministries launch new bonds and report market gains

The Ministry of Finance has launched a new 15-year inflation-linked Treasury bond, marking a shift from previous domestic debt instruments that typically ranged from three months to nine years at fixed rates. Finance Minister Neal Rijkenberg stated that the floating rate, which includes an additional fixed top-up, is designed to reduce the risk premium associated with long-term fixed-rate borrowing. The instrument specifically targets long-term investors, such as pension funds, to help match their long-term liabilities and ensure savings grow above inflation.

In Hong Kong, the Mandatory Provident Fund (MPF) system is projected to record a monthly investment gain of approximately $31.1 billion for August, bringing year-to-date gains to $128.7 billion. Total MPF assets are forecasted to reach approximately $1.713 trillion by the end of the month. Performance has been bolstered by Asian equities and RMB bonds, which are seeing their highest year-to-date returns since the inception of the MPF.