The Hanoi Stock Exchange (HSX) has successfully raised VND8 trillion (USD380.3 million) from auctioning Government and bank bonds.
Vietnam’s market yet to develop at expected rate due to its heavy dependence on bank loans
According to the Exchange, the Vietnam Development Bank (VDB) issued on February 8 VND6.338 trillion (USD301.29 million) bonds with terms of from three to five years.
The entire bank’s VND2.7 trillion (USD128.35 million) worth of three-year bonds were sold at 12.2% per annum interest rate.
It also succeeded in selling all of its five-year bonds worth VND3.638 trillion (USD172.94 million) at an interest rate of 12.25% per year.
Investors lukewarm on Government long-term bonds
On February 9, the State Treasury of Vietnam issued VND5 trillion (USD237.68 million) bonds with terms ranging from three to ten years.
Government three-year bonds attracted the most investors who registered to buy up to VND11.009 trillion (USD523.34 million), compared to the VND2 trillion (USD95.07 million) on offer. Such bonds were sold at an 11.9% interest rate per year.
All of VND2 trillion of the five-year bonds were sold at an interest rate of 11.98% a year while investors registered to buy up to VND7.93 trillion (USD376.97 million) worth of such bonds.
Government’s ten-year bonds have been proven to be less attractive to investors who registered to buy only VND610 billion (USD28.99 million) out of total VND1 trillion (USD47.53 million) offering.
The Government bond sale was conducted as part of efforts by monetary policy makers to intensify efforts to boost the country’s capital market.
In the time to come, the Government aims to encourage enterprises to raise capital via official capital markets, instead of mainly based on bank loans as currently.
Banks can also raise capital by issuing bonds in order to improve their liquidity and reduce their dependence on the interbank market as well as the State Bank of Vietnam (SBV)’s open market operations.
The SBV recently emphasised the necessity of banking restructuring from the first quarter of this year in a bid to improve bank liquidity and gradually lower interest rates.
