Econ
Government bond mobilization drops sharply in April
The State Treasury of Vietnam raised more than VND6.05 trillion (US$266.74 million) through 23 G-bond auctions in April, down 45 percent against the previous month.
According to the Hanoi Stock Exchange (HNX), which organized the G-bond auctions, only 30.4 percent of the bonds on offer at the auctions were sold out with rising interest rates. As compared to March, the annual interest rates of the bonds rose by 0.02-0.1 percentage points per year.
Accordingly, the coupon rates of five-year term bonds and seven-year term bonds were 2.97 percent and 3.43 percent, respectively. Successful bidders of ten-year term bonds would enjoy an interest rate of 4.05-4.10 percent per year while the coupon rate for 15-year, 20-year and 30-year term bonds ranged from 4.45-4.47 percent, 5.10-5.12 percent and 5.42 percent.
On the secondary market, the total volume of Government bonds sold by the outright method reached over 1 billion worth VND116.9 trillion, down 4.1 percent in value from a month earlier.
Trading volume through repurchase agreements (repos) was more than 1.34 billion bonds valued at VND140.2 trillion, decreasing 5.7 percent in value from March.
In the latest G-bond auctions on May 2, the State Treasury of Vietnam also raised over VND2.1 trillion ($92.08 million). The auctions offered a total of VND5 trillion ($219.25 million) worth of G-bonds with different maturities. Four tenures were offered at the HNX, including five-year and seven-year bonds valued at VND1 trillion ($43.85 million) each alongside 10-year and 15-year bonds valued at VND1.95 trillion ($85.5 million) each.
The latest auction of five-year bonds mobilized VND64 billion ($2.8 million) at the average interest rate of 2.97 percent per year. The rate was the same as that during the previous auction on April 24.
Some VND1.045 trillion ($45.8 million) worth of 10-year bonds were sold at the average yield rate of 4.15 percent per year in two auctions, 0.05 percent higher than those in April 18.
A combined VND1 trillion ($43.85 million) worth of 15-year bonds were purchased at the average yield rate of 4.5 percent in two auctions, an increase of 0.03 percent per year from the April 24 event. Meanwhile, no bond was sold at the seven-year bond auction.
The State Treasury of Vietnam has raised more than VND48.57 trillion ($2.13 billion) worth of G-bonds since the beginning of 2018.
The value of G-bonds issued in 2018 is estimated at some VND180 trillion ($7.93 billion), with the focus being on long term maturity and keeping the interest rate at low levels.
In 2017 the government 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.
G-bonds valued at US$2.13 billion have been raised to date
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On the secondary market, the total volume of Government bonds sold by the outright method reached over 1 billion worth VND116.9 trillion, down 4.1 percent in value from a month earlier.
Trading volume through repurchase agreements (repos) was more than 1.34 billion bonds valued at VND140.2 trillion, decreasing 5.7 percent in value from March.
In the latest G-bond auctions on May 2, the State Treasury of Vietnam also raised over VND2.1 trillion ($92.08 million). The auctions offered a total of VND5 trillion ($219.25 million) worth of G-bonds with different maturities. Four tenures were offered at the HNX, including five-year and seven-year bonds valued at VND1 trillion ($43.85 million) each alongside 10-year and 15-year bonds valued at VND1.95 trillion ($85.5 million) each.
The latest auction of five-year bonds mobilized VND64 billion ($2.8 million) at the average interest rate of 2.97 percent per year. The rate was the same as that during the previous auction on April 24.
Some VND1.045 trillion ($45.8 million) worth of 10-year bonds were sold at the average yield rate of 4.15 percent per year in two auctions, 0.05 percent higher than those in April 18.
A combined VND1 trillion ($43.85 million) worth of 15-year bonds were purchased at the average yield rate of 4.5 percent in two auctions, an increase of 0.03 percent per year from the April 24 event. Meanwhile, no bond was sold at the seven-year bond auction.
The State Treasury of Vietnam has raised more than VND48.57 trillion ($2.13 billion) worth of G-bonds since the beginning of 2018.
The value of G-bonds issued in 2018 is estimated at some VND180 trillion ($7.93 billion), with the focus being on long term maturity and keeping the interest rate at low levels.
In 2017 the government 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.
