Trading in China’s much-anticipated RMB 40 billion ($5.5 billion) issue of special 30-year sovereign bonds was suspended twice on its market debut on Wednesday, as exchanges warned of “abnormal fluctuations” and urged investors to be rational and pay attention to the risks, reports the Financial Times. Beijing plans to sell a total of RMB 1 trillion 20 to 50-year sovereign bonds this year to fund government spending in critical areas as a way of trying to spur growth. The first batch of the bonds debuted on the Shanghai and Shenzhen stock exchanges, rather than just over the counter at banks, giving Chinese retail investors greater access than usual.
Prices for the new bonds, which offered a 2.57% yield at launch, surged 13% at the open before trading was suspended. They later jumped to a 25% gain on the day before a second suspension by the Shanghai Stock Exchange.
In the final minutes of trading, prices fell back and the bonds closed 1.3% higher on the day. Similar price spikes also triggered suspensions by the Shenzhen exchange on Wednesday. Bond trading in the coastal city closed up 20% on the day.