When prices for international school debentures reached HK$3 million they were called crazy. Two years on, the cost of securing a scarce place in one of the city's elite centres of learning has soared to as much as HK$3.7 million.
And rising second-hand prices for debentures are driving increases in the face value of new ones schools are issuing. At one school, the issue price has risen eightfold since June 2007.
Schools sell debentures - a form of long-term debt instrument - to parents and companies to raise funds for building works. Parents and employers buy them to jump the queue for school places.
"Many of our clients say: 'Our child has met the standard but they don't have a place'," said Wing Chan, manager of one agency trading debentures, Elite Membership Services. "But once they buy the debenture, someone will contact them and say there is a vacancy for them. That's amazing.
"If you ask the school, they will say that it's not guaranteed. But our experience is that it's almost 100 per cent. That's why there [are] not [many debentures] on offer at the moment. Otherwise the school can't arrange a vacancy."
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