Chinese Banks Make 6.8B Yuan in Over-the-counter Sales of Local Government Bonds by Early April


Commercial banks in China have commenced the sale of local government bonds either over-the-counter or in some cases via mobile or online banking channels.

As of 2 April Chinese banks had made 6.8 billion yuan in over-the-counter sales of local government bonds across six trial provinces and cities according to a report from state-owned media.

11 banks in Beijing including Agricultural Bank of China, Industrial and Commercial Bank of China and Bank of Communications are selling local government bonds either over-the-counter or via mobile or online channels.

ABC sets a minimum subscription amount of 100 yuan, with clients able to purchase local government over-the-counter for a processing fee of 10 yuan, or open an online account to make purchases for 8 yuan.

On 29 March the Beijing municipal government issued 16.2 billion yuan in 2019 second-round Beijing municipal government bonds, of which 2 billion yuan were issued via the commercial bank over-the-counter market.

The five-year special bonds sold over the counter in Beijing are for land banks and shanty town upgrades, providing a coupon of 3.25% which is 25 basis points above the five-day average yield for government bonds of the same maturity.