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Bonds drop on speculation rates to rise at debt sales
Vietnam’s bonds fell on speculation the government will need to offer higher coupons at debt sales to raise funds. The currency dropped.
The country has managed to sell only VND2.2 trillion (US$123 million) of the planned VND26 trillion of debt it auctioned this year, as investors demanded higher interest rates, according to the Hanoi Stock Exchange’s website.
“Investors expect the government to increase the rate to make its debt sales successful,” said Trinh Hoai Giang, deputy general director at the Ho Chi Minh City Securities Corp. “The government only has half a year left and it needs money to bolster growth and to fund other development plans.”
The benchmark five-year notes ended two days of gains, with the yield climbing three basis points to 9.35 percent, according to a daily fixing price from about 10 banks compiled by Bloomberg. A basis point is 0.01 percentage point.
The dong weakened 0.3 percent to a record-low VND17,852 per dollar at 3:32 p.m. in Hanoi, according to data compiled by Bloomberg.
The State Bank of Vietnam set yesterday’s reference rate at VND16,955, versus VND16,953 Wednesday, its website showed. The currency is allowed to trade by as much as 5 percent on either side of the official rate.
thanhnien, Bloomberg
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