This week my eyes were opened to the wild system of debentures in the Hong Kong international school system.
In brief, some of the best international schools in Hong Kong issue debentures (a kind of bond) to help pay for construction and other costs. These debentures are then bought by companies for their expatriate employees, or direct by parents, who are then given a place in the school, or at least allowed to jump ahead in the queue.
Demand for debentures is now far in excess of supply, leading to vibrant trade and soaring prices. This week, the front page of the South China Morning Post reported that for one school, agents quoted a rate of HK$3 million (that’s about SGD $600,ooo, or USD $380,000) for a debenture. And the school’s official rate is HK600,000!
And I thought the Singaporean obsession with enrichment classes was bad….
Here’s an article if you’d like to read more – “The $1m question”, The Economist