Safe haven for 6 month investment

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  1. #1

    Safe haven for 6 month investment

    Hi all,

    Wonder if someone can help. I need somewhere to park a reasonable amount of cash (between HKD 0.5m and 1m) for the next 6 months. Just leaving the money in an HSBC account will earn only a very small amount of interest so I am looking for other more fruitful options.

    I also would not like to invest in any stock market as I already have other investments dependent on this.

    I have read somewhere on this forum about regularly converting HKD to Chinese Yuan as an investment. Can someone tell me more about this ? ie, Risks, Steps, etc ?

    OR if there are any other suitable 'Safe' investments I can look at ?

    Thanks in advance,
    StrangerInHK


  2. #2

    Join Date
    Jun 2005
    Location
    Hong Kong
    Posts
    23,205

    The problem with RMB is that you can only transfer 20,000 per day in or out (unless you want to move lots of cash physically into China, but I would regard that as high risk). So it would take you more than a month to get your money in and another month to get it out. The buy-sell spread has also recently been increased so I'm not sure you would make all that much money overall, and of course, maybe none at all if the exchange rate doesn't move.

    Bonds might be a good option. You can buy, for example, PCCW bonds which currently offer a yield of about 5.6%pa (on an 8% coupon). You could guarantee this if you hold them to maturity (2011 if I recall correctly) but the price is quite low (anticipating a rise in interest rates) so even if you sell them again you should still do all right.


  3. #3

    Join Date
    Mar 2007
    Location
    Gold Coast Marina
    Posts
    17,934

    What currency is your money in? If you are prepared to take currency risk then interest rates on the NZD are pretty high right now (circa 7%) although you do take the risk of the NZD depreciating. I have loads of them still since I moved from NZD and I worry whether it's going to fall but 6 months might be ok ....

    (Frankly PDLM's bond idea sounds safer!)


  4. #4

    Thanks so far...

    Thanks for the 2 options...

    Currently the money is in HKD. I did look at the NZD time deposits as the return looked fairly attractive (or at least compared to the HSBC nominal rate).

    However I'm not sure I want to be tied up to the FX risk so currently the Corporate bond option looks like a safer bet. I've never bought bonds before so can someone suggest how I would purchase these ? Can I buy through HSBC for instance ?

    Or any other options out there ?

    Rgds


  5. #5

    Join Date
    Jun 2005
    Location
    Hong Kong
    Posts
    23,205

    I buy (and sell) bonds through HSBC online. They have a reasonable selection of low(-ish) risk bonds in USD, HKD and a few in Euros.


  6. #6

    Thanks

    I'll take a trip down to HSBC and see what they can tell me about the bond investments.

    Rgds