Vietnam’s domestic bonds grew the strongest in East Asia in the third quarter of this year with a value of USD21 billion, the Asian Development Bank (ADB) said in a recent report.
Vietnam’s domestic bond market saw the strongest growth rate in East Asia in the third quarter of this year
The figure showed an increase of 21.4% compared to the same period last year.
According to the report, bond profitability rates for most economies in the region were falling during the quarter amid medium inflation, good economic growth and stable demand by investors. However, China was an exception due to increasing worries about its economic growth and inflation.
The ADB said the region’s domestic bonds totalled USD6.2 trillion during the quarter, up 3.5% from the figure of late June and up 11% against late September 2011. Government bonds continued to take a decisive role with a total of USD4.1 trillion in circulation by the end of September, up 3.1% compared to the figure of late June.
The bank assessed that Vietnam’s domestic bonds grew the strongest in the region during the quarter. However, the market saw a decrease of 2.7% compared to the quarter earlier due to a fall in the values of government bonds and corporate bonds compared to late June.
The values of circulated government bonds decreased as a result of a 62% tumble in the value of treasury bills issued by the State Bank of Vietnam.
Several corporate bond markets saw faster growth compared to the government bond markets, with circulated bonds valued at USD2.2 trillion by late September, up 4.2% compared to late June.
However, there have been differences in the total values of issued bonds in the third quarters between economies, increasing 38.1% in Malaysia, 13% in the Philippines, 10.5% in China, but down 81.3% in Vietnam, 25.9% in China’s Hong Kong and 8.1% in Thailand.
Iwan Azis, Head of ADB's Office of Regional Economic Integration, said there had been some risks to domestic bond markets as the US may face fiscal cliff while China’s new leaders would have to face a slowdown in economic growth. Other potential dangers include varying investment flows and high inflation.
Developments in developed financial markets also had negative impacts on regional bond markets, he added.