RMB bonds worth 5 billion yuan issued in Hong Kong, well received by investors
Published: Dec 07, 2022 09:30 PM Updated: Dec 07, 2022 09:17 PM


The Ministry of Finance on Wednesday issued 5 billion yuan ($716.32 million) worth of treasury bonds in the Hong Kong Special Administrative Region (HKSAR), as yuan-denominated instruments continue to be warmly received by institutional investors.

The Wednesday issue was the fourth round of the ministry's planned treasury bond sales in the HKSAR this year.

The fourth round, worth 5 billion yuan, included two-year bonds worth 4 billion yuan and 10-year bonds worth 1 billion yuan.

The issuance was well received by institutional investors with the total bid amount reaching 17.68 billion yuan, 3.54 times the amount in circulation, according to a press release posted by the Hong Kong Monetary Authority.

Specifically, the 4 billion yuan of the two-year bonds has an average issue price of 99.99 yuan, or a rate of 2.45 percent. For the 10-year bond sale, worth 1 billion yuan, the issue had an average issue price of 98.95 yuan, at a rate of 2.95 percent, according to a Ministry of Finance press release.

The ministry planned to issue treasury bonds worth 23 billion yuan through four tranches in the Hong Kong SAR this year.

The first issuance of the year was completed in mid-June. The 7.5-billion-yuan bond sale, composed of three equal tranches of two-, three- and five-year treasury bonds, was at least four times oversubscribed by institutional investors.

The second batch of 5 billion yuan, issued in August, was 4.36 times over-subscribed. A third round totaling 5.5 billion yuan issued in October was 4.09 times over-subscribed.

Hong Kong is the world's largest offshore yuan trading hub, settling roughly 75 percent of global yuan trading outside the Chinese mainland.

Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on Wednesday that the warm acceptance of all four issuances of the yuan-denominated treasury bonds demonstrated the instruments' attractiveness to overseas investors as it is one of the most competitive products.

Dong noted that the issuing of offshore yuan treasury bond will also speed up the yuan's internationalization as the yuan still is not regarded as a top choice for reserves.

In September, the ministry successfully issued yuan-denominated bonds worth 3 billion yuan in the Macao SAR.