China has sold the first tranche of a two-billion-yuan (291.11 million U.S. dollars) bond in Macao Special Administrative Region.

The Ministry of Finance said in a statement on Friday it sold 1.7 billion yuan of 3-year bonds at a 3.05 percent coupon to institutional investors on Thursday, ranging from pension funds to commercial banks, that were 3.2 times oversubscribed.

The ministry said it will sell the second 300 million yuan 2-year retail portion at a 3.3 percent coupon starting on Friday. Subscription to that bond will be open until July 19, according to Refinitiv IFR.

The issuance will help develop Macao's bond market and financial services with its own characteristics, the ministry added.

The market reaction to the issuance, quality, security and stable investment attributes of the bonds showed they were attractive to Macao residents, said Leong Vai Tac, secretary of economy and finance of Macao Special Administrative Region.

The issuance of RMB government bonds in Macao for the first time by the Chinese central government helps the region to diversify its economy and develop a financial market with Macao characteristics. Additionally, it increases the sense of participation of Macao residents in the integration of national development, Leong added. 

Macao, which generates about 80 percent of government revenues from gambling, is considering launching a yuan-based stock market to help it diversify away from gaming, officials told Reuters last month.

It is also beefing up financial services under China's Greater Bay Area plan to integrate the territory with China's Hong Kong Special Administrative Region, the largest offshore yuan hub, and nine cities in Guangdong Province.

(With input from Reuters)