By Wang Lan (China Daily)
Updated: 2007-10-12 15:03

The China Yangtze Power bonds exceeded analyst expectations today in their first day of trading. The mainland's first corporate bond debuted on the Shanghai stock exchange this morning at a premium over its issued price.

Related readings:  China Yangtze Power bonds test the market  Yangtze Power to offer corporate bonds  Yangtze Power profit jumps 72% on output, bank sale

The bonds were traded at 101.51 yuan apiece, up 1.51 yuan from the issue price of 100 yuan. As a result, yields dropped 22 basis points to 5.13 percent and a coupon rate of 5.35 percent. The turnover rate of the bonds on the exchange this morning is an estimated 1.4776 percent. Total turnover amounted to 59 million yuan.

Analysts say the price premium today reflected institutional investors' demand for bonds with higher yields than government issues. Active traders include China Life and the People's Insurance Company of China (PICC).

"Today's trading indicates insurance companies are interested in corporate bonds," said Nie Wen, an analyst at Industrial Securities.

"The first corporate bonds performed well on its inaugural day due to the strong credit rating of the issuing company," said Li Fei, an analyst at a fund management company.

Separately, Yunnan Copper Co today announced plans to issue corporate bonds amounting to a possible 2.9 billion yuan with maturity of 5 to 10 years. Before Yunnan Copper, property developers like Vanke and Gemdale Co also announced their plans to issue corporate bonds.