Vietnam’s bonds decline on speculation banks will slow purchases

Vietnam’s five-year bonds fell on speculation banks will slow debt purchases as they hoard cash to meet fund requirements ahead of the year-end and the Lunar New Year that falls on Jan. 23. The dong weakened.

“Bonds dropped as most banks have to reserve cash for consumers’ holiday spending,” said Ho Chi Minh City-based Nguyen Duy Phong, an analyst at Viet Capital Securities.

Yields on five-year debt rose eight basis points, or 0.08 percentage point, to 12.57 percent, according to a daily fixing from banks compiled by Bloomberg. That is the highest level since August.

The dong fell 0.3 percent to 21,036 per dollar as of 4:00 p.m. in Hanoi, according to data compiled by Bloomberg. The central bank set the reference rate at 20,828, its website showed. The currency is allowed to trade up to 1 percent on either side of the official rate.

bloomberg

>   Vietnam government bonds advance as inflation slows; Dong gains (23/12/2011)

>   Vietnam’s bonds decline on inflation concern; Dong advances (22/12/2011)

>   Vietnam bonds decline on speculation bank demand low; Dong gains (16/12/2011)

>   Vietnam bonds climb most since August as central bank adds funds (20/12/2011)

>   Vietnam’s bonds rise on interest-rate outlook; Dong declines (15/12/2011)

>   Vietnam’s bonds advance on interest-rate outlook; Dong steady (06/12/2011)

>   Vietnam 10-year bonds gain most since May as inflation slows (05/12/2011)

>   The bond issuance plans that raise doubts (05/12/2011)

>   Vietnam’s bonds drop most in week as fund shortage durts demand (30/11/2011)

>   Vietnam bonds drop as bank demand falls before Lunar New Year (30/11/2011)