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VND66 trillion G-bond sale plan set for Q2

Duc Nam
Wednesday,  May 3,2017,22:55 (GMT+7)
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VND66 trillion G-bond sale plan set for Q2

Duc Nam

HCMC - A minimum of VND66 trillion is the volume of government bonds to be offered by the State Treasury under the Ministry of Finance this quarter.

Deputy General Director Tran Kim Van of the State Treasury on April 25 signed Official Letter 1653 announcing the plan for government bond issuance in the second quarter of 2017 to raise funds for the State budget and for investment and development.

The volume on offer for each maturity is as follow: VND20 trillion for five-year term, VND10 trillion for seven-year, VND8 trillion for 10-year, VND10 trillion for 15-year, VND8 trillion for 20-year and VND10 trillion for 30-year term.

The plan does not include the volume of government bonds issued to Vietnam Social Security.

The total government bond release by the Ministry of Finance for 2017 is set at VND183.3 trillion.

Government bond auctions have been less lively than last year as the demand for five-year bonds has weakened. Still, the sales of longer terms remain healthy.

The winning interest rate last week fell sharply.

In the most recent session on April 26, at the Hanoi Stock Exchange (HNX), the State Treasury called for total bids of VND6.5 trillion for five maturities: five-year (VND1.5 trillion), seven-year (VND1 trillion), 15-year (VND1.5 trillion), 20-year (VND1 trillion) and 30-year (VND1.5 trillion).

Five-year bonds attracted 10 participants. In the end, VND1 trillion worth of this maturity was sold with a winning interest rate of 5.22% per annum, 0.1 point higher than on the previous session (April 19).

Meanwhile, seven-year bonds lured participants and fetched VND810 billion with a winning rate of 5.48%, 0.05 point higher than in the preceding session (April 12).

The terms of 15 years, 20 years and 30 years brought in VND1.5 trillion, VND930 billion and nearly VND1.5 trillion respectively, with coupons of 6.74%, 7.1% and 7.63% a year.

Since the beginning of 2017, the State Treasury has successfully mobilized around VND81.58 trillion via the HNX, as per the data of this stock exchange.

On the secondary government bond market, liquidity is stable at average level. Credit institutions forecast that with the recent developments of the banking system’s liquidity, the government bond market will not produce any positive impacts yet.

As of end-March, the total outstanding value of government bonds, government-guaranteed bonds and local government bonds in circulation had been over VND949.53 trillion, according to the Vietnam Bond Market Association.

In particular, the value of government bonds had reached nearly VND784.3 trillion, accounting for 82.6%, while government-guaranteed bonds and local government bonds had amounted to some VND143.98 trillion and VND21.25 trillion respectively, making up 15.16% and 2.24%.

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