Vietnam's three-year bonds on Thursday rose the most in almost four months after yields fell at a government debt auction. The dong weakened.
The State Treasury sold VND1 trillion ($48 million) of three-year notes with a 9.29 percent coupon on Wednesday, according to a posting on the Hanoi Stock Exchange website. The treasury sold the same tenor debt with a coupon of 9.55 percent on Nov. 13. Another VND1 trillion of two-year securities were sold at 9.15 percent, compared with 9.35 percent previously.
"Demand at the auction was high, so the market thinks prices will rise," said Pham Phuong Lan, the Hanoi-based head of fixed-income and currency trading at Bank for Investment & Development of Vietnam.
The yield on the three-year bonds fell 18 basis points, or 0.18 percentage point, to 9.41 percent, according to a daily fixing rate from banks compiled by Bloomberg. That's the biggest decline since July 30 and the lowest level since Aug. 23. The yield on the benchmark five-year notes dropped eight basis points to 9.83 percent.
The dong weakened 0.1 percent to 20,863 per dollar as of 3:27 p.m. in Hanoi Thursday, according to data compiled by Bloomberg. 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 as much 1 percent on either side of the daily fixing.