Mirae Asset Securities CI
[Point Economy] Mirae Asset Securities is launching a subscription for individual investment government bonds in May for individual investors seeking stable asset formation. Following the introduction of the 3-year bond last month, all types have recorded oversubscriptions for four consecutive months, maintaining high interest, which draws attention to the potential success of this month’s offering.
Subscription open for 5 days from today… Total scale of 200 billion won
Mirae Asset Securities announced that it will conduct subscriptions for individual investment government bonds for 5 business days, excluding public holidays, from the 11th to the 15th. The total issuance size is 200 billion won, with 110 billion won for 10-year bonds, 50 billion won for 5-year bonds, and 30 billion won for 20-year bonds, while 5 billion won each is allocated for 3-year coupon bonds and compound interest bonds.
Subscriptions can be made from 9 AM to 4 PM through Mirae Asset Securities’ nationwide branches and the mobile app M-STOCK. Individual investment government bonds are highly secure as they are issued by the state, and offer the advantage of compound interest payments combining the face value interest rate and an additional interest rate when held to maturity.
For this May’s issuance, longer-term bonds offer greater additional interest rate benefits. The 20-year bond has an additional interest rate of 1.30%, resulting in a pre-tax yield of 160.80% (8.04% annual average) if held to maturity. The 10-year bond also applies a 1.05% additional interest rate, expecting an annual average yield of 5.92%.
Tax benefits are another advantage. A separate taxation (14%) on interest income applies to total purchase amounts up to 200 million won, making it attractive to high-income investors. However, it should be noted that for 3-year coupon bonds, which pay regular interest annually, the separate taxation benefit is not applicable.
Popularity soars after system improvement… 15,670 trillion won in subscriptions rushed in Q1
Individual investment government bonds are evaluated to have become more attractive following system improvements by the Ministry of Finance and Economy. In fact, the total subscription amount for the first quarter of this year reached 15,670 trillion won for a total offering of 700 billion won, recording a competition ratio of 2.24 to 1.
A Mirae Asset Securities official stated, “With the expansion of additional interest rates for long-term bonds and separate taxation benefits, nationwide interest is growing,” adding, “As the sole sales agency, we will do our best to help citizens form assets stably.” Early redemption is possible after one year from issuance, but in this case, the additional interest rate, compound interest, and separate taxation benefits are not applied.
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