The pandemic has shown central bankers and public debt managers that innovation and creativity are needed to maintain borrowing opportunities and keep local currency bond markets functioning.
On an annual basis, the bond market expanded 19.0% year-on-year in the first quarter of 2021, led by corporate bonds, which more than doubled during the quarter.
Government and corporate bonds comprised 82.8% and 17.2% of the local currency bond market, respectively, at the end of December 2020.
This growth was supported by expansion in both the government and corporate bond segments, stated the ADB.
A credible domestic rating agency is a critical missing jigsaw piece in the orderly development of a healthy sustainable bond market in Vietnam, stated the ADB.
This is mainly due to lower outstanding debt in the government sector, even though the corporate bond stock increased.
This is mainly due to the government bond segment growing 10.5% quarter-on-quarter in the first quarter, to reach US$53.3 billion.
The government bond market decreased by 3.9% quarter-on-quarter in local currency terms to US$49.2 billion at the end of December 2019.
In 2021, Vietnam strives to have its government bond included in global recognized bond indices such as JP Morgan, Bloomberg Barclays, Citi World Government.
This expansion was due mainly to a 4% on-quarter growth in government bonds to US$51 billion as the central bank increased issuance of bills.