China's 20-year special treasuries meet hot retail demand
SHANGHAI, May 27 (Reuters) -China's 20-year special treasury bonds started retail distribution via two banks on Monday and one of the banks sold its portion within 30 minutes, reflecting hot demand from yield-hungry investors.
The bonds, priced at a coupon rate of 2.49% during last week's auction, are the latest batch of China's 1-trillion-yuan ($138.03 billion) ultra-long special treasury bonds to be sold this year.
The debt paper forms part of a broader effort by Beijing to bolster key sectors of the country's struggling economy.
Most of the 20-year bonds, totalling 40 billion yuan, were sold to institutional investors such as banks and insurers, and a small portion are being sold to retail investor via China Merchants Bank and China ZheShang Bank.
China Merchants Bank started accepting investor subscriptions for 500 million yuan worth of the bonds at 10 a.m. (0200 GMT) and by 10:30 am the bonds had already been sold out, according to the sales status indicated by the bank's mobile app.
The warm reception underscores investors' flight to safety as China's property crisis, volatile stock market and a struggling economy spark a rush toward government bonds, squeezing yields.
In another sign of feverish retail demand, the first batch of China's ultra-long special treasury bonds - with tenor of 30 years - surged more than 20% at one point on their stock exchange debut last week, triggering trading suspensions.
The special bonds, which also include 50-year tenor, will be sold in many batches over the next six months.
($1 = 7.2450 Chinese yuan renminbi)
Reporting by Shanghai newsroom
Editing by Shri Navaratnam
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