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UPDATE 1-China to launch first yuan bonds in Macau

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SHANGHAI/HONG KONG, June 25 (Reuters) - China will issue two billion yuan ($291.04 million) in yuan-denominated treasury bonds in Macau on July 4, the finance ministry said on Tuesday.

This will mark the first Chinese Treasury bond sale in Macau, according to Refiniv Eikon and a source at Macau's Monetary Authority.

The Ministry of Finance said in a statement that the bond sales will continue to strengthen financial cooperation between the mainland and Macau, bring more issuers to and speed up the development of the local bond market.

Macau is also considering launching a yuan-based stock market to help it diversify away from gaming, its main source of revenue, the city's de facto central bank told Reuters earlier this month.

Beijing has encouraged the city to develop financial products and services under its plan for a 'Greater Bay Area' - the integration of 11 southern cities to create a mega economic powerhouse.

The former Portuguese colony will mark its 20th anniversary of its return to Chinese rule in December, and will hold its once-in-five-years leadership election in August. ($1 = 6.8720 Chinese yuan)

(Reporting by Winni Zhou and Andrew Galbraith in SHANGHAI and Noah Sin in HONG KONG; Editing by Sam Holmes & Kim Coghill)