China Finance Ministry Sells Dim Sum Bonds at Same Cost as July

(Bloomberg) -- China sold 4.5 billion yuan ($650 million) of dim sum bonds in Hong Kong at the same cost as its last auction in July, according to a statement from the Ministry of Finance.

The ministry sold 1.5 billion yuan of five-year bonds to institutional investors on Wednesday with a yield of 3.8 percent and issued 3 billion yuan of two-year notes at 3.65 percent. It also sold 500 million yuan of debt to foreign central banks and monetary authorities.

The auction results come despite the yield on benchmark 10-year sovereign bonds climbing more than 10 basis points in the onshore market since early July, driven by a rise in China’s consumer price index and tighter liquidity at the end of the third quarter.

Chinese bonds may get a reprieve as the government is expected to loosen monetary policy to aid a slowing economy and investors switch to safer assets as stocks slump amid mounting trade tensions with the U.S. Foreigners are still keen on onshore debt as they boosted their holdings for a 19th straight month in September, albeit at a slower pace as the yuan tumbled.

©2018 Bloomberg L.P.