A 30 billion yuan five-year financial bond issued by the China Development Bank (CDB) yielded a 3.75 percent rate of return on Thursday, far higher than the 3.62 to 3.67 market estimate, according to publicized data.

With China's economy on the cusp of a firm recovery, investors' worries of tightening macro-policies led the yield much higher than Wednesday's 3.6354 percent on the secondary market, said market analysts.

While compared with the previous two CDB batch results, the higher-than-secondary market yield was no surprise when taking into account its large floatation amount, reasonable terms, and active market trading, said traders.

The opinion was shared by Bank of Nanjing, which held that 3- to 5-year financial bond yields face upward risks in November.

This is because of a widely expected flattening in China's yield curve, which will inevitably be faster in the short- and mid-end and relatively slower in the long-term.A bleak 1.11 times of subscription ratio was generated for the sale, said market watchers.

The bond was the 20th batch issued this year by CDB with payment and value dates both falling on November 11, 2009.

CDB was a state-owned ex-policy bank before transforming into a commercial bank in late 2008. However, the credit ratings of its bond issuances would enjoy zero risk prior to 2010.

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