(ECNS) -- The Ministry of Finance (MOF) on Sunday issued 40-billion-yuan ($6.19 billion) of electronic savings bonds, the first batch for this year, which were all sold out by 10 a.m. as investors rushed to scoop them up via online banking services or at banking outlets.
Only individual investors were allowed to buy the bonds, 20 billion yuan worth having a three-year maturity and a coupon rate of four percent, and 20 billion yuan with a five-year maturity and a coupon rate of 4.42 percent, the MOF said.
According to a report by Beijing Youth Daily, a China Construction Bank outlet in Beijing had processed only one transaction over the counter for five-year bonds before the system showed the quota had been used up. Another outlet of the bank sold none.
"The bonds are comparable to Spring Festival train tickets in that it (whether you can get some) all depends on your personal charisma," the report quoted an unnamed banking clerk as saying.
A woman surnamed Li said she was ready before 8 a.m. on Sunday to buy some five-year treasury bonds for her mother via online banking. She instantly clicked the mouse when trading opened, but still failed to get any because the bonds were snapped up within two minutes, according to the paper.
Many senior citizens in Beijing had arrived at banking outlets the previous day and waited overnight in order to buy the bonds.
A man in his 70s opened an account to buy bonds at 3 a.m. on Saturday and prepared everything in advance. At around 9 p.m., he began the long wait for sales to begin the next morning. However, the banking outlet announced that all five-year bonds were sold out within half an hour of opening, followed by the three-year bonds, just a little more than ten minutes later. Some investors had waited for three to four hours, only to end up empty handed.
A clerk surnamed Wang from one outlet of a state-owned bank told the paper the quota was used up within four minutes of opening.
Hot sales come at a time when China's central bank has cut interest rates six times, the stock market remains on a turbulent ride and wealth management products continue to see shrinking yields.
The current base interest rate for three-year deposits is 2.75 percent and some banks have floated that to 3.8 percent, but it is still lower than the coupon rate of three-year treasury bonds. Many banks offer the same rate for five-year deposits as three-year deposits, while some others offer three percent, far lower than the coupon rate of five-year bonds.
Expected average yields of wealth management products offered by Chinese banks stayed at 3.89 percent in March, slightly down from February, according to data from Rong360, the Chinese search and recommendation engine for financial products.
