Vietnam G-bonds market heats up in early 2022

The total transaction value of Government bonds (G-bonds) in January was estimated at VND254.5 trillion (US$11.2 billion), averaging VND13.4 trillion ($590.7 million) per session. This represented a sharp increase of 19.19% against 2021.

In 2021, the Government raised a total of VND318.2 trillion ($14 billion) via G-bonds. Photo: The Hanoi Times

Meanwhile, the State Treasury of Vietnam raised over VND23 trillion (US$1 billion) through 14 G-bonds auctions at the Hanoi Stock Exchange (HNX) in the first month of the year, down 23.6% against the last December.

Upon breaking down, G-bonds with a maturity of 10 years made up the largest proportion of 46%, equivalent to the total value of VND10.6 trillion ($467.3 million).

The HNX informed the yields of  G-bonds with maturities of 10, 20, and 30 years remained unchanged, but slightly increased for the 15-year maturity.

Trading volume through repurchase agreements (repos) accounted for 39.66% of total transaction value in the market, with foreign investors making up only 1.67% of the value, with a net sell amount of VND1.24 trillion ($54.6 million).

In 2021, the Government raised a total of VND318.2 trillion ($14 billion) via G-bonds, or 98.21% of the year’s target, which remained a major source for state budget revenue.

Minister of Finance Ho Duc Phuoc in a National Assembly session held late 2021 hinted the Government plans to mobilize VND180 trillion (US$8 billion) in the next two years via G-bonds to finance economic recovery plans.

A report from the ADB in late 2021 estimated Vietnam’s local currency bond market around VND1,902.1 trillion (US$83.6 billion) at the end of last September, in which G-bonds accounted for 74.4% of Vietnam’s bond market, and corporate bonds comprised 25.6%.