China to issue 2 billion renminbi in gov’t bonds

The Chinese Central Government will issue 2 billion renminbi-worth (USD290.6 million) of government bonds in Macau on July 4, according to a joint announcement yesterday by the Ministry of Finance of the People’s Republic of China, and the local government in Macau.

Local authorities said they welcome the issuance of the renminbi bonds in Macau.

In the statement, the government said the issuance would mark a milestone in the development of Macau’s financial sector and accelerate the development of a local bond market. It also assists with the diversification plan for Macau’s economy, the government said.

The Monetary Authority of Macao is currently studying the establishment of a securities market in the city. It is an idea that dates back to the 1980s but was never seized upon by successive administrations.

The Central Government’s decision to issue government bonds in Macau coincides with the year of the 20th anniversary of the special administrative region.

A source at the Monetary Authority told Reuters that China has never sold treasury bonds in the MSAR.

The Financial Times reported that the issuance is not the first renminbi-denominated debt issued in Macau. That came in February 2018 with the issuance of RMB4 billion by the state-run Bank of China Macau Branch, it said, citing Standard Chartered.

The local government said the bonds will not only appeal to corporate investors but will also provide the Macau public with another option for investment.

The public will be able to subscribe to the bonds via participating banks. Detailed information regarding the distribution network for the product will be made available in a guidance manual on the government bonds and via announcements by competent authorities. DB