Vietnam's bonds rise on speculation yields will fall at auction

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Vietnam's government bonds advanced, pushing yields to the lowest level in more than a year, on speculation rates will drop at a weekly auction on Thursday. The dong was steady.

The State Treasury will sell a total VND4 trillion ($192 million) of two-, three- and five-year notes, according to the Hanoi Stock Exchange. The treasury sold similar-maturity securities at 11 percent, 10.94 percent and 11.1 percent, respectively on March 8. The yields fell from 11.2 percent, 10.97 percent and 11.2 percent at the March 1 auction.

"Rates at the next bond sale will probably decline," said Nguyen Hong Quang, a Hanoi-based fixed-income dealer at Bank for Agriculture & Rural Development, the country's biggest lender. "Yields in the secondary market will also drop."

The yield on the government's five-year bonds slid four basis points, or 0.04 percentage point, to 11.49 percent, the lowest since February, 2011, according to daily fixings from banks compiled by Bloomberg.

The dong traded at 20,830 per dollar as of 3:50 p.m. in Hanoi on Wednesday, the same as Tuesday, according to data compiled by Bloomberg. The central bank set the daily reference rate at 20,828, unchanged since Dec. 26, its website showed. The currency is allowed to trade up to 1 percent on either side of the fixing.

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