China sold US$2.1 billion in government bonds in the Hong Kong market on Wednesday despite the recent cash crunch in the mainland money market that spooked investors this week, Reuters reported. Demand for the yuan-denominated bonds was higher than analysts predicted, although yields were below those offered by the same issuers in the secondary market. The sale painted a mixed picture, with the portion reserved for central banks to purchase seeing stronger demand than the previous government sale while purchases by financial institutions were slightly weaker, according to Crystal Gao, a Hong Kong-based strategist for HSBC.
