The three- and five-year notes have a coupon rate of 3.9% and 4.32% a year, down 0.1 percentage point from the issuance in March.
Still, they are appealing to investors who want to lock in the interest rate for the long term amid expectations of lower interest rates in the future.
Some middle-aged retail investors queued a day before the bond issuance, which requires registration at the bank counters, according to Xinhua News Agency.
A Beijing branch of the Industrial and Commercial Bank of China said its quota of RMB 2.6m was sold out within half an hour. A man bought RMB 800,000 of bonds himself, the bank’s representative said.
Another branch saw a woman planning to buy RMB 1m.
Appetities seem to be changing as the short-term trading preference, characteristic of China’s retail investors, gives way to more long-term thinking after the market rout in late 2015.
Some investors said they prefer a guaranteed return over other wealth management products or the volatile stock market.
Average wealth management products offered by banks now yield roughly 4% a year and also have strong demand, although the investment period is much shorter at one year.
Other money market funds offered by online investment platforms, such as Alibaba’s Yuebao, offers annualised return of 2.71% on average.
Bond mutual funds, on the other hand, saw an average 0.4% drop in return in the first quarter this year amid concerns of rising default rates. They yielded an average 10.4% last year, according to data provider Wind.
Offshore funds available for sale in China through the Mutual Recognition of Funds also saw surging sales since the scheme launched in late 2015.
