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Financial commentator blame iBond for its helplessness

出自香港新聞網 - 樹仁新傳系學生實習習作

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--095176 2012年2月07日 (二) 23:23 (UTC)


Financial commentator blame iBond for its helplessness


The 2012-13 Budget was announced last week. One of the policies is the continued launch of iBond, which has been criticized by some people, “iBond becomes a tool to gain a good impression. The only one who can benefit from iBond must be the government itself,” said Chiu Sin-chun, a financial commentator of the now TV, when attending a seminar held by the Hong Kong Shue Yan University this afternoon.

The 2012-13 Budget was announced by the Financial Secretary John Tsang Chun Wah last week, which mentioned that the retail bond market will be further developed. Besides, a further issuance of iBond that worth less than $10 billion will be launched.


iBond (Inflation Bond) is a low-risk, liquid savings product. People earn interest by buying bonds and they will be protected from inflation because iBond is linked up with inflation, which means that the higher the inflation, the more interest will be earned. The government releases the interest that drawn from taxes.


Yet, this policy is criticized by some people, “In better words, iBond is constructed to be inflation-resistance. It is constructed to help individuals who have lower incomes to resist inflation. People can use the extra-gained money to pay for the inflation price,” Chiu Sin-chun said, “But the truth is that the government only sells bonds to gather money from people and leaves the money there. The government does not have any plan for using the money in other policies or investments.”[So... the iBond scheme works, and the issue is that the government is not doing anything with the collected money?]


Chiu commented that the action of selling iBond is too short-sighted. A unit of iBond values ten thousand dollars and the interest rate can never catches up with the inflation rate [Why can't it catch up?], “The low-income individuals cannot easily purchase iBond because it is still too expensive to them,” he said.


Chiu said neither the low-income individuals nor the middle-class can benefit from iBond. The interest released is drawn from taxes and different portions of money are drawn from different taxes to become the interest. Middle-class is the largest group of people who are paying taxes, “The whole policy is about delivering the middle-class’ money to the grassroots people. The middle-class cannot gain anything except purchasing iBond. For those who do not purchase it, this is not a policy that can make them happy,” he said.


However, there must be a reason why the government creates iBond. Chiu said the government may want to do something to please the lower- income people, “In the Budget, the iBond is further developed. The government needs to deal with the problem of inflation and help the people to overcome it. Therefore, iBond becomes a tool to gain a good impression. The only one who benefit from iBond must be the government,” he said.

[Grade: B]

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