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Nearly $850m raised from Gov’t bonds in January

The Government mobilised VND19.36 trillion (US$849 million) through 12 Government bond (G-bond) auctions in January, up 63.3 per cent against the previous month.

 

According to the Ha Noi Stock Exchange (HNX), which organised the auctions, 97.3 per cent of G-bonds offered at the auctions were sold out.

The coupon rates were 4.30 per cent a year for five-year term bonds, 4.35 per cent for seven-year term bonds and 4.38 to 5.15 per cent for 10-year term bonds. The rates for 15-year term bonds were 4.5-5.2 per cent a year, while those for 20-year term bonds and 30-year term bonds were 5.2 per cent a year and 5.4 per cent a year, respectively.

Compared to late 2017, the rates were lower for all terms, ranging from 0.22-0.82 per cent.

In the secondary market, the total volume of G-bonds sold by the outright method reached more than 1.06 billion, worth VND118 trillion ($5.2 billion), up 4.3 per cent in value over December 2017.

Trading volume through repurchase agreements was 1.15 billion bonds, worth more than VND118 trillion, a decrease of 2.6 per cent in value compared to the previous month.

Foreign investors also made outright purchases of more than VND8.9 trillion and outright sale transactions of VND8.1 trillion. They made repo buys of over VND220 billion and repo sales of over VND247 billion in the first month of this year.

The National Financial Supervisory Commission predicted that the G-bond market in 2018 will see modest change against last year, thanks to the economic growth of more than 6.7 per cent and inflation of below 4 per cent.

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.

G-bonds worth VND159.9 trillion ($7.04 billion) and having 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 per cent a year, down 0.2 percentage points against 2016, the Ministry of Finance reported.

In 2017, the Government had approved a roadmap for the development of the bond market from 2017 to 2020 with a vision for 2030, in which the outstanding debt in Viet Nam’s bond market is targeted at 45 per cent of the total gross domestic product (GDP) in 2020 and some 65 per cent of the GDP in 2030.

Under the plan, the outstanding debt of the G-bond, Government-guaranteed bond and municipal bond markets is aimed at some 38 per cent of the total GDP in 2020 and 45 per cent in 2030. The corporate bond market’s outstanding debt is expected to reach some 7 per cent of the GDP in 2020.

The roadmap aims at stable development, larger and better quality of Viet Nam’s bond market, which should have more diverse products, proactively integrate into the global market and gradually operate in line with international standards and practices.

For this, Viet Nam is set to complete its policy framework for the bond market, develop the primary and secondary markets, diversify investors and facilitate intermediary institutions and market services.

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Nearly $850m raised from Gov’t bonds in January

The Government mobilised VND19.36 trillion (US$849 million) through 12 Government bond (G-bond) auctions in January, up 63.3 per cent against the previous month.

 

According to the Ha Noi Stock Exchange (HNX), which organised the auctions, 97.3 per cent of G-bonds offered at the auctions were sold out.

The coupon rates were 4.30 per cent a year for five-year term bonds, 4.35 per cent for seven-year term bonds and 4.38 to 5.15 per cent for 10-year term bonds. The rates for 15-year term bonds were 4.5-5.2 per cent a year, while those for 20-year term bonds and 30-year term bonds were 5.2 per cent a year and 5.4 per cent a year, respectively.

Compared to late 2017, the rates were lower for all terms, ranging from 0.22-0.82 per cent.

In the secondary market, the total volume of G-bonds sold by the outright method reached more than 1.06 billion, worth VND118 trillion ($5.2 billion), up 4.3 per cent in value over December 2017.

Trading volume through repurchase agreements was 1.15 billion bonds, worth more than VND118 trillion, a decrease of 2.6 per cent in value compared to the previous month.

Foreign investors also made outright purchases of more than VND8.9 trillion and outright sale transactions of VND8.1 trillion. They made repo buys of over VND220 billion and repo sales of over VND247 billion in the first month of this year.

The National Financial Supervisory Commission predicted that the G-bond market in 2018 will see modest change against last year, thanks to the economic growth of more than 6.7 per cent and inflation of below 4 per cent.

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.

G-bonds worth VND159.9 trillion ($7.04 billion) and having 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 per cent a year, down 0.2 percentage points against 2016, the Ministry of Finance reported.

In 2017, the Government had approved a roadmap for the development of the bond market from 2017 to 2020 with a vision for 2030, in which the outstanding debt in Viet Nam’s bond market is targeted at 45 per cent of the total gross domestic product (GDP) in 2020 and some 65 per cent of the GDP in 2030.

Under the plan, the outstanding debt of the G-bond, Government-guaranteed bond and municipal bond markets is aimed at some 38 per cent of the total GDP in 2020 and 45 per cent in 2030. The corporate bond market’s outstanding debt is expected to reach some 7 per cent of the GDP in 2020.

The roadmap aims at stable development, larger and better quality of Viet Nam’s bond market, which should have more diverse products, proactively integrate into the global market and gradually operate in line with international standards and practices.

For this, Viet Nam is set to complete its policy framework for the bond market, develop the primary and secondary markets, diversify investors and facilitate intermediary institutions and market services.

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