SHANGHAI/BEIJING- China’s finance ministry said on Monday it will start the long-awaited sales of long-term treasury bonds that Beijing hopes will help stimulate key sectors of a flagging economy this week.
The finance ministry confirmed what four sources had told Reuters earlier on Monday that the 1 trillion yuan ($138.23 billion) of special government bonds will have tenors of 20 to 50 years and issuance will begin on May 17.
The sources who have direct knowledge of the plans said 300 billion yuan worth of 20-year bonds, 600 billion yuan worth of 30-year bonds and 100 billion yuan worth of 50-year bonds would be issued.
Market participants have been waiting for weeks for details of the issuance pipeline of these special treasury bonds, which were first announced during China’s parliamentary conference in March.
Given the issuance was foreseen, news of the details caused bond yields to slip slightly. The yield on 30-year bonds fell 2 basis points to 2.55 percent. It is down 30 bps this year.
Zou Wang, an investment director at Shanghai Anfang Private Fund Management, said that while such a supply of bonds is negative for prices, it had been priced in.
