Vietnam plans to boost domestic debt sales to a record VND150 trillion (US$7.2 billion) in 2013 as falling property prices and stagnant bank lending supports demand for the government notes, according to the State Treasury.
The Southeast Asian nation will sell VND120 trillion of bonds with maturities of between two and 15 years, and VND30 trillion of Treasury bills, Tran Minh Hang, deputy head of the treasury, she said in a telephone interview today. The country sold an all-time high of 141 trillion dong of securities last year, he said.
"We want to take the chance when difficulties in other markets have slowed banks from extending loans and prompted investors to put money in bonds, which are a relatively safe and profitable investment channel," Hang said from Hanoi.
The government is struggling to raise revenue this year after it granted tax exemptions, reductions and payment delays to help businesses cope with the slowest annual economic growth since 1999. The World Bank forecast in December that Vietnam's gross domestic product will increase 5.5 percent this year, compared with 5.03 percent in 2012, which would be the third year of below 6 percent growth.
Vietnam's property market is "frozen and faces many difficulties with about VND112 trillion of real-estate projects unsold," according to a January posting on the website of the National Assembly's Economic Committee. Credit growth may remain slow in the first few months of 2013, Prime Minister Nguyen Tan Dung said on Jan. 1.
The yield on the three-year notes was little changed at 8.56 percent as of 4:10 p.m. in Hanoi, according to a daily fixing rate from banks compiled by Bloomberg. The five-year yield was steady at 9.32 percent, almost double the 4.83 percent rate on similar-maturity Indonesian sovereign securities.
"There's good appetite for government debt now, especially from overseas investors," said Nguyen Duy Phong, a Ho Chi Minh City-based analyst at Viet Capital Securities Co. "Vietnamese bond yields are at attractive levels compared to regional markets."
The dong traded at 20,938 per dollar, compared with 20,935 on March 8. The central bank fixed the reference rate at 20,828, unchanged since Dec. 26, 2011, according to its website. The currency is allowed to trade as much as 1 percent on either side of the rate.
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