Vietnam’s government bonds fell for a second day on speculation investors sold debt after the longest run of weekly gains since May.
The two-year yield rose 12 basis points to 5.24 percent as of 4:33 p.m. in Hanoi, the biggest increase since May 14, according to a daily fixing from banks compiled by Bloomberg. The yield had dropped 53 basis points over the past four weeks and is down 181 basis points this year.
“Bonds gained for a long time this year and reached a level that prompted traders to sell for profit,” said Nguyen Tan Thang, a fixed-income investment director at Ho Chi Minh City Securities Joint-Stock Co. “The rebound in yields may not last long as banks still have idle money to invest in bonds due to slow lending.”
The five-year yield rose seven basis points, or 0.07 percentage point, to 6.53 percent. That was the biggest advance since May 16.
Bank loans climbed 3.68 percent in the first seven months of 2014, while lenders’ total deposits rose 7 percent in the same period, according to an e-mailed statement from the central bank today. Vietnam risks missing its 2014 growth target of 5.8 percent if ministries and provinces don’t implement their planned measures to spur the economy, Prime Minister Nguyen Tan Dung said at an investment conference in the central coastal city of Danang last week.
Growth is “very likely” to be about 5.6 percent this year as businesses are struggling, Bui Quang Vinh, minister of planning and investment, said in an interview last week.
The dong traded at 21,198 per dollar in Hanoi, little changed from 21,208 yesterday, according to prices from banks compiled by Bloomberg. The State Bank of Vietnam fixed its daily reference rate at 21,246, according to its website. The currency is allowed to trade as much as 1 percent on either side of the rate.