In this Feb 28, 2018 photo, Hong Kong's Financial Secretary Paul Chan Mo-po talks at a press conference at Central Government Offices. (Photo: China Daily)

HONG KONG - The Hong Kong Special Administrative Region government on Monday announced the launch of the 2020 inflation-linked retail bond, or iBond.

In a statement issued on Monday afternoon, the government said the iBond would be issued under the retail part of the Government Bond Programme for subscription by Hong Kong residents.

"The issuance is an initiative announced in the 2020-21 Budget to provide residents with a safe and stable investment alternative while further developing the local bond market," Financial Secretary Paul Chan Mo-po was quoted as saying in the statement.

The target issue size of the iBond will be up to HK$10 billion. The authorities may consider increasing the issue size to a maximum of HK$15 billion depending on the market's response, according to the statement.

It added that the bond will have a tenor of three years. Bond holders will be paid interest once every six months at a rate linked to inflation in Hong Kong, subject to a minimum rate of two percent.

The subscription period of the iBond will start from 9 am on October 23 and end at 2pm on November 5. Hong Kong residents may apply for the iBond through a placing bank, securities broker or the Hong Kong Securities Clearing Company Limited, according to the statement.

It added that the iBond will be issued on November 16 and listed on the Stock Exchange of Hong Kong on the following business day (November 17). It can be traded in the secondary market afterwards.