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C.C. done by ALI

China auctions

treasury bills

for first time

SHANGHAI: China auctioned government treasury bills for the first time on Tuesday, putting three billion yuan of one-year bills on the block, the Shanghai Securities News reported.

The paper is part of China's 1995 treasury bill issue of 152 billion yuan.

A total of 31 underwriters bid for 4.65 billion yuan of paper and priority will be given on the basis of early settlement, the report said. Settlement is September 18-21.

The People's Construction Bank of China made the biggest bid, one billion yuan.

China originally planned to issue 10 billion yuan in one-year paper this year. Seven billion yuan worth was to be issued to the public through an electronic underwriting system and three billion by auction.

The 1.65 billion yuan by which the issue was oversubscribed will now be diverted to the bonds issued electronically, the paper said.

The electronic issue of one-year bonds starts on Wednesday and will last for one month.

Among the bidders at the Shanghai auction were China's leading banks, brokerages and trust and investment companies.

All one-year bills will be traded electronically on the Shanghai and Shenzhen stock exchanges, the Wuhan Securities Exchange Centre, Tianjin Securities Trading Centre and the Beijing-based Securities Trading Automated Quotation System.

It will be the first time that short-term paper has been traded in this way, the paper said. The move is in line with Beijing's policy of using short-term paper as an instrument of monetary control through central bank open-market operations.

A total of 52 banks and financial institutions are underwriting this year's one-year bills.-Reuter