Vietnam’s five-year yield drops most in 18 months on bank demand


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Vietnam’s five-year yield drops most in 18 months on bank demand
Vietnam’s sovereign bonds rose, pushing down the five-year yield by the most since March 2013, after banks purchased government debt at a sale yesterday.
The State Treasury sold all of the 5 trillion dong ($235 million) of notes it offered at the auction. It issued 2019 bonds at 5.05 percent, 10-year debt at 6.28 percent and 15-year securities at 6.96 percent, according to a statement from Hanoi Stock Exchange. That compares with yields of 5.79 percent, 6.95 percent and 7.48 percent, respectively, last month.
The five-year yield fell 24 basis points, or 0.24 percentage point, to a record low of 5.01 percent, a daily fixing from banks compiled by Bloomberg showed. The yield dropped 46 basis points from Sept. 26, the most in three weeks.
“It is still difficult for credit institutions to lend out money,” Bao Viet Securities analysts Ha Thi Thu Hang and Nguyen Hai Yen wrote in a report. “Amid high liquidity in the system and stable interbank interest rates, government bonds remain attractive to banks.”
Credit growth this year was about 7 percent as of Sept. 29, central bank Governor Nguyen Van Binh said that day. “The growth rate is still far from the target of 12 percent to 14 percent set by the State Bank of Vietnam at the beginning of this year,” Bao Viet Securities said in the report.
The dong fell 0.2 percent today and 0.4 percent this week to 21,300 per dollar. The central bank fixed the currency’s reference rate at 21,246, unchanged since June 19, 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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