Government raises VND56 trillion from bonds
Updated at Saturday, 19 May 2018, 14:30
The Hanoitimes - The State Treasury of Vietnam has so far this year successfully mobilized more than over VND56 trillion (US$2.46 billion) via G-bond auctions in the Hanoi Stock Exchange.
In the latest auction held on May 16, the Treasury offered a total of VND6 trillion ($263.7 million) worth of G-bonds with different maturities, including five-year and seven-year bonds valued at VND1 trillion ($44 million) each, and 10-year and 15-year bonds at VND2 trillion ($88 million).
At this auction, a total of VND3.98 trillion ($147.9 million) was raised. Of the four terms, the State Treasury of Vietnam raised VND500 billion ($21.9 million) worth of five-year bonds with the average yield rate of 3 percent per year, 0.03 percent higher than that on May 2.
G-bonds worth VND3.98 trillion were issued on May 16.
A total of VND1.9 trillion ($83.5 million) worth of 10-year bonds was sold at two separate auctions, with an interest rate of 4.23 percent per year.
Meanwhile, VND1.58 trillion ($69.4 million) was mobilized at two 15-year bond auctions with an interest rate of 4.58 percent a year. No bond was sold at the seven-year bond auction.
The State Treasury planned to issue G-bonds worth VND200 trillion this year, with the focus being on long term maturity and keeping the interest rate at low levels.
Accordingly, G-bonds with term of below 5 years will account for VND20 trillion each, 5-year bonds will make up VND30 trillion, and 7-year bonds will represent VND36 trillion. The value for 10-year, 15-year, 20-year and 30-year bonds will be VND37 trillion, VND32 trillion, VND20 trillion and VND25 trillion, respectively.
The National Financial Supervisory Commission forecast that the G-bond market in 2018 would see modest change thanks to the economic growth of more than 6.7 percent and inflation staying below 4 percent.
Reports from the Ministry of Finance showed that G-bonds worth VND159.9 trillion ($7.04 billion) with an average maturity of 13.52 years (up 4.81 years against 2016) were issued last year. The bonds had an average interest rate of some 6.07 percent per year, down 0.2 percentage points against 2016.
Last year, there were dozens of sessions that had trading value exceeding VND10 trillion. Repo trading accounted for 49.24 percent of total trading value.
The government last year also approved the roadmap for the development of the bonds market by 2020 with a vision for 2030, in which the outstanding debt in the Vietnamese bond market is targeted at 45 percent of the total GDP in 2020 and some 65 percent of the GDP in 2030.
Under the plan, the outstanding debt of the Government bond, Government-guaranteed bond, and municipal bond market is aimed at some 38 percent of the total GDP in 2020 and 45 percent in 2030. The corporate bond market's outstanding debt is expected to reach 7 percent of the GDP in 2020.
The roadmap aims for stable development, larger size, and better quality in the Vietnamese bond market, which should have more diverse products and proactively integrate into the global market as well as gradually apply international standards and practices.
For this, Vietnam is set to complete its policy framework for the bonds market, develop the primary and secondary markets, diversify investors, and facilitate intermediary institutions and market services.
According to Phung Quoc Hien, vice chairman of the National Assembly, the government has gained significant success in restructuring public debt, especially G-bonds. Short-term debts make up a smaller proportion and the coupons slide.