Vietnam government bonds decline as stocks rally

Vietnam’s five-year bonds fell on speculation investors preferred higher yielding assets as local stocks rallied. The dong strengthened.

Yields climbed the most in more than a week as the nation’s benchmark VN-Index of shares rose to an almost eight-month high, surging more than 80 percent since touching a four-year low on February 24.

“Many investors have focused more on the stock market lately,” said Le Duc Tho, head of the investment department at Hanoi-based Vietnam Bank for Industry and Trade, known as VietinBank.

The yield on the five-year note jumped six basis points to 9.21 percent, according to a daily fixing price from 10 banks compiled by Bloomberg. It reached 20.53 percent in June last year, before the central bank in October began a round of interest-rate cuts that halved its key rate to 7 percent.

Vietnam’s dong advanced to 17,776 per dollar as of 4:27 p.m. Tuesday in Hanoi, from 17,784 Monday, according to data compiled by Bloomberg.

The State Bank of Vietnam set the reference rate at VND16,935 per dollar Tuesday, compared with VND16,937 Monday, according to its website. The currency is allowed to trade up to 5 percent on either side of the official rate.

thanhnien, bloomberg

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