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Bonds gain on short supply
Vietnam’s benchmark five-year bonds Tuesday gained, driving their yield down by the most in a month, as supply of the notes was constrained by a government strategy to let auctions fail when borrowing costs are too high.
The State Treasury last week was unsuccessful in selling debt for a fifth consecutive auction since March as investors demanded higher yields than the government was willing to pay. Vietnam Expressway Corp., the state-owned toll-road operator, has also struggled to draw bids for its bond sales this year.
The supply of public debt is “limited,” according to Do Hoang Quynh Trang, a fixed-income trader at Hanoi-based Ocean Commercial Joint-Stock Bank. “There have been no five-year bonds on offer for about a week now, even though investors are also interested in these notes.”
The yield on the five-year notes fell 21 basis points to 9.55 percent, the biggest decline since June 11, according to a daily fixing from some banks compiled by Bloomberg. A basis point is 0.01 percentage point.
thanhnien, bloomberg
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