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Chinese investors turn to govt bonds for better return

08-10-2011 18:43 BJT

Beginning Wednesday, China will issue 30 billion yuan, or about 4.7 billion US dollars, in certificate treasury bonds. The highest annual yield is for the 5 year bond, at 6.15 percent. Our reporter Yin Hang visited some banks in Beijing this morning, to see how they're being received by Chinese investors.

Under the current volatile market conditions, making wise investment decisions is vital.

74-year-old Beijing citizen Wang Lihua is one of many Chinese investors transferring whatever investments she can from equities into treasury bonds.

But part of her lifetime savings is still locked up in the wildly fluctuating mainland stock markets. So she lined up at 5 o'clock this morning for the chance to buy certificate treasury bonds.

Wang Lihua, Beijing citizen said "My investments in the stock market are locked in. I guess I have to leave them to my grandchildren. This time I'm hoping to buy the one-year term T-bonds. The return is much higher than the current bank interest rate. I prefer them to the three-year and five year bonds because their terms are too long, and who knows what will happen until then. "

This batch of treasury bonds includes 6 billion yuan one-year bonds with a fixed annual interest rate of 3.85 percent, 15 billion yuan three-year bonds with an annual interest rate of 5.58 percent, and 9 billion yuan five-year bonds with an annual interest rate of 6.15 percent.

Liu Wenzhen, Manager of ICBC, Huichengmen Branch said "We've seen more than 60 clients waiting outside our branch this morning, hoping to purchase certificate treasury bonds. Due to their comparatively high returns and low risks, many of our clients, especially for those who prefer stable investment, will choose bonds."

China has issued a total of about 120 billion yuan, about 18 and a half billion dollars, worth of treasury bonds in three batches this year. So far, they've been snatched up quickly by investors. The Ministry of Finance hasn't said whether there will be another batch released this year.

Editor:Xiong Qu |Source: CNTV.CN

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