VND250 trillion worth of government bonds targeted
HCMC - The Department of Banking and Financial Institutions under the Ministry of Finance has published the goal of mobilizing VND250 trillion for the State budget via government bond sales in 2017.
Such a large number seems to further show the optimism of those issue government bonds this year, after a record of VND281.75 trillion was set in 2016.
The VND250 trillion target comprises nearly VND34.4 trillion worth of bonds guaranteed by the Government, VND8-10 trillion of local government bonds and over VND200 trillion of government bonds launched by the State Treasury.
The Ministry of Finance informs the State Treasury will issue bonds with a variety of maturities (from less than one year to 30 years). Specifically, those with a term of less than one year to 3 years will account for 20%, five years to 10 years some 60%, 15 years and above 20%.
This agency will continue to release three products: bonds with annual interest payment, bonds with the first interest payment period shorter or longer than the standard, and bonds without periodic interest payment (zero coupon bond).
As a market organizer and operator, the Hanoi Stock Exchange (HNX) revealed their three major objectives in 2017: diversification of products, market liquidity boost and optimization of market information transparency. The HNX will promote issuing tax-exempt local government bonds based on the needs of the issuer; develop a bond trading system with a floating interest rate, launch two new repurchase agreement products: borrow government bonds to sell or to sell/buy back.
The scheme for development of the corporate bond market will be completed, with a guiding circular and a dedicated portal for this market. These are the steps towards building a corporate bond market for Vietnam.
The primary government bond market last year grew more than 40% compared to 2015, with a total issuance volume of VND281.75 trillion, a rise of 26.85% over the preceding year, according to Vietnam State Treasury.
The scale of the market keeps expanding. As of December 31, 2016, outstanding government bonds had reached 26% of GDP, the highest proportion ever.
The market listings totaled more than VND930.52 trillion last year, up 23.5% from 2015 and 65.82% from 2013. The average listing term has been extending and passed the five-year mark in 2016 (5.21 years).
Secondary transactions have been increasingly active, especially in 2016, with a surge of 73.84% against 2015. The average transaction value sharply increased from 2015 (reaching VND6.35 trillion per session).
Last year, the frequency of participation in bidding and the winning value of foreign investors achieved impressive growth in comparison with 2015.