Aberdeen Asset Management Plc said it has bought Vietnamese dollar bonds for the first time on optimism inflation will ease and help spur domestic consumption and economic growth.
Aberdeen Global Emerging Markets Bond Fund bought the Southeast Asian nation's dollar debt in the past month, with the securities now amounting to 1 percent of its US$1.1 billion in assets, Pongtharin Sapayanon, Aberdeen's Bangkok-based head of fixed income for Thailand, said at a press briefing Wednesday.
"Vietnamese dollar bonds offer a very attractive yield of 4 percentage points more than US Treasuries with comparable maturities," Sapayanon said. "The worst inflation fear in Vietnam has probably passed. That will enable the central bank to cut rates to spur growth."
Vietnam has a year-end inflation target of about 18 percent, the government said this month, after price gains reached a 33-month high of 23 percent in August. Restraining inflation will allow the central bank to cut its benchmark interest rate, Sapayanon said.
The State Bank of Vietnam will leave interest rates unchanged for now and consider cutting them if inflation slows, the government said last month. The central bank has raised policy rates this year, including a series of increases in its repurchase, refinancing and discount rates, and then subsequently cut its repurchase rate for the seven-day term to 14 percent from 15 percent on July 4.