The Ministry of Railways will issue 30 billion yuan (HK$34.08 billion) in fixed-rate bonds next week to finance its massive railway construction projects.
The ministry said yesterday that it would sell the bonds on the interbank market in two tranches, one 20 billion yuan issue of seven-year bonds on Wednesday and 10 billion yuan worth of 15-year bonds on Thursday. The planned yields will be in the 3.52 to 4.52 per cent range.
The deal's main underwriters are BOC International (China) and UBS Securities.
Guotai Junan securities senior analyst Lin Zhaohui said the railway construction would have an immediate effect on flagging economic growth by boosting domestic demand for investment.
The mainland's economic growth in the third quarter slipped to 9 per cent from 10.1 per cent in the second quarter, its first single-digit quarterly growth rate in about five years.
Most economists are gloomy about the mainland's growth prospects for next year, with some even estimating GDP will drop to 6 per cent as the financial crisis feeds into the real economy.
