Vietnam's benchmark five-year bonds on Friday rose the most in two months after yields fell at a debt auction yesterday. The dong weakened.
The State Treasury sold VND1.3 trillion ($62.4 million) of the VND2 trillion of five-year notes on offer at a yield of 9.88 percent, according to the Hanoi Stock Exchange. At the last sale on July 12, it issued VND500 billion of similar-maturity securities at 9.9 percent, compared with the VND2 trillion available.
"The actual yield at auction, and the amount sold at the auction, implies that investors have come back to the market," said Tran Kieu Hung, a Hanoi-based fixed-income trader at Bank for Investment & Development of Vietnam.
The yield on five-year bonds fell 15 basis points, or 0.15 percentage point, to 9.95 percent in Hanoi, according to a daily fixing from banks compiled by Bloomberg. That's the biggest drop since May 10. Yields fell 12 basis points this week, the most since the period ended June 8.
The dong traded at 20,850 per dollar as of 3:23 p.m. on Friday in Hanoi, compared with 20,843 Thursday, according to data compiled by Bloomberg. The currency strengthened 0.1 percent from July 13.
The State Bank of Vietnam set its reference rate at 20,828, unchanged since Dec. 26, according to its website. The currency is allowed to trade up to 1 percent on either side of the rate.