Vietnam's bond yields rise to six-week high ahead of auctions

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Vietnam's benchmark five-year bonds fell, pushing the yield to the highest level in almost six weeks, ahead of a government debt sale on June 21. The dong advanced.

The State Treasury will offer VND5 trillion ($239 million) of two-, three- and five-year securities, according to the Hanoi Stock Exchange. The state-owned Bank for Social Policies will auction VND3 trillion of debt on Wednesday and Vietnam Development Bank will sell VND5 trillion of notes on June 22, according to the bourse. The treasury sold just 21 percent of the VND6 trillion of bonds it offered at an auction last week, compared with 41 percent at the previous sale.

"There has been less demand in the primary market," said Ha Thi Quynh Trang, a Hanoi-based fixed-income trader at Bank for Investment & Development of Vietnam. "In the secondary market, people are selling to realize profit."

The yield on the five-year bonds gained seven basis points, or 0.07 percentage point, to 9.70 percent, the highest level since May 9, according to a daily fixing rate from banks compiled by Bloomberg.

The dong rose 0.1 percent to 20,945 per dollar as of 4:14 p.m. Tuesday in Hanoi, according to data compiled by Bloomberg. The State Bank of Vietnam set the currency's reference rate at 20,828, unchanged since Dec. 26, according to its website. The dong is allowed to trade as much as 1 percent on either side of the rate.

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