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Bond market raises $10.7b in three years
The Vietnamese Government bond market celebrated its third birthday yesterday, having raised a significant portion of the State budget since its inception in September 2009.
The total amount of bonds sold during the period totals VND224.7 trillion (US$10.7 billion), while some auctions have seen winning bids reach up to VND6-7 trillion ($285.7-333.3 million).
Meanwhile, the number of participants has now increased to 84 members.
For these participants, bond yeilds are the most important factor. Prior to 2009, bonds were yielding higher rates than on the money market. However, since the bond market was formed, the yields have been 1-2 per cent per year lower.
"The Government bond market is improving its transparency day by day," a spokesman for the Ha Noi Stock Exchange said. The scale of the market has grown steadily over the years, from VND159.54 trillion ($7.5 billion) in 2009 to VND339.34 trillion ($16.1 billion) as of August this year.
Although the number of listed bonds has declined from 500 to the current amount of 428 codes, the total value increased, forming large-cap bonds and boosting liquidity.
As the operator of the market, the exchange plans to establish a bond index and derivatives, diversifying trading tools and helping reduce market risks.
"Government bonds are a safe and profitable investment in a troubled economy," said Military Bank's head of treasury devision Luu Tien Cuong.
Since late last year, the bank has been adding Government bonds to its portfolios while other investors failed to pay attention.
"If the economy improves with lower inflation in the coming time, our bank will look to further invest in bonds," Cuong said.
He also proposed that the stock exchange issues regular assessments of the activities in the market to ensure it would always be a safe but profitable investment channel.
In August, the Ha Noi Stock Exchange launched the electronic bidding system, connecting itself with bidders and management agencies.
The system contributed to shortening the time from bonds being issued to listed, the exchange said. In addition, it officially brought T-bills into operation, with the hope of developing a yield curve.
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