Chinese investors are showing sustained interest in treasury bonds for their stable return, with residents queuing up outside banks to buy the newly issued saving bonds.
The Ministry of Finance on Friday started to issue two more batches of certificate saving bonds totaling 30 billion yuan (more than 4.15 billion U.S. dollars).
One batch of bonds worth up to 15 billion yuan (more than 2.07 billion U.S. dollars) have a maturity of three years and a fixed coupon rate of 2.38 percent, while the other batch of five-year bonds will come with a fixed coupon rate of 2.5 percent and issuance volume up to 15 billion yuan.
In Beijing, Tianjin and Zhejiang Province, many residents were seen waiting in lines in front of banks very early in the morning to secure the bonds.
"I came here late. Look at the long lines here, there's a fat chance that I can buy bonds today," said a local resident.
"I arrived at around 7:00. I didn't make it during the first two issuances, so I thought I'd come earlier this time. I plan to buy 200,000-300,000 yuan (about 27,670-41,500 U.S. dollars) [worth of bonds]," said another resident in Tianjin.
Some even started waiting on streets the night before the issuance.
Government bonds are regarded as comparatively low-risk investments with slightly higher yields than fixed deposits, making them sought-after products among investors who seek stable returns.
During the issuance in March, 14 of the 466 outlets of a large commercial bank in Beijing had seen their certificated savings bonds being sold out within half an hour. In April, 99.7 percent of the electronic savings bonds were sold on the first day of issuance.
"Our five-year [deposit interest rate] has been raised to 2.4 percent, and the rate of five-year treasury bonds is 2.5 percent, which is 0.1 [percentage points] higher. Many elderly people still prefer deposits and treasury bonds which guarantee capital repayment with a fixed interest rate," said Lan Shan, vice president of Agricultural Bank of China's Beijing Cuiwei Tower Branch.
The issuance of the two bonds will end on May 19.
Treasury bonds popular with investors across China
