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Bond demand hits seven-month high
Demand for Government bonds has hit a seven-month high, helping the State Treasury successfully issue all 5-15 year bonds worth VND4 trillion (US$175.43 million) set for bidding last week.
The monetary report released by the Saigon Securities Incorporation (SSI) this week showed that the registration ratio for the auction rose 356 per cent, the highest level since October 2016. The high demand also helped the Treasury successfully call for an additional bidding of more bonds worth VND1.2 trillion.
Thanks to the high demand, it was easy for the Treasury to issue the bonds at yield falling six percentage points, stopping the constantly upward trend of the yield since February.
In the week, the Bank for Social Policies also issued successfully five,10 and 15 year bonds worth VND720 billion out of VND1 trillion set for bidding. The 10-year bond yield fell six percentage points, while the 15-year bond yield slid 20 percentage points.
In the secondary market, rising bond demand has also helped improve liquidity significantly. Total bond value traded last week reached VND42.5 trillion, or VND8.5 trillion per bid on average. Foreign investors also increased their buying value from VND800 billion to VND1.3 trillion last week, making them become net buyers of VND477 billion.
The bond yield in the secondary market continuously fell by 2-11 percentage points, of which the three-year bond yield posted the highest decrease of 11.6 percentage points, followed by the one and two-year bond yields of 11 and 6.4 percentage points, respectively.
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