According to analysts of Saigon Securities Incorporation (SSI) Research, in the last week of November, Vietnam Development Bank (VDB) continue to offer bonds for the third consecutive week with a total amount of 3.547 trillion dong.
In particular, terms of 10 and 15 years were still preferred, of which the registered volume were four times higher than offer volume, and winning value was 100 percent although the winning bond yields fell by respectively 10 basis points and three basis points. Terms of five and seven years did not record any successful issuance due to the fairly stressful liquidity of commercial banks, and the rise of interbank rates to nearly four percent higher than the winning bond yields of VDB for terms of five and seven years in the previous week.
However, the policy to reduce interest rates of the State Bank of Vietnam (SBV) has become more and more clearly. Most recently, the agency reduced OMO interest rate on November 26th, making the demand for government bonds on 10-year term to sharply rise. All the 5.5 trillion dong of government bond offered on terms of 10, 15 and 20 years in the week were issued, recording the most successful bidding session in the month. The winning interest rate simultaneously dropped by nine to 30 basis points across all terms.
In general, in November, 13.279 trillion dong of government bonds were issued. The average ratio of winning volume to offer volume in the month was 788.5%, while the average winning term was 14.24 years, higher than the 13.7 years recorded in the previous two months.
In the first 11 months of 2019, 187.911 trillion dong of government bonds were issued, completing 72.3 percent of the issuance plan for the whole year. The average winning term was 13.5 years, significantly higher than the average of 12.15 years in 2018.
On the secondary market, the interest rates saw similar movements to primary market with a reduction of four to 10 basis points across all terms. Specifically, the one-year, three-year, five-year, 10-year, 15-year, 20-year and 30-year bond interest rates were respectively 2.06%, 2.22%, 2.39%, 3.56%, 3.72%, 4.2%, and 4.57 percent per annum.
The total trading value of the entire market reached 57.7 trillion dong, down by 12 percent over the previous week, in which the proportion of outright trading sharply increased and reached up to 68%. Foreign investors recorded a trading value of 2.341 trillion dong, almost equal value on both buying and selling. The net buying value of government bonds was 16 billion dong in the last week.
In November, foreign investors net sold 672 billion dong of government bonds, recording the second consecutive month after nine consecutive months in the previous time.
However, in the 11 months of 2019, foreign investors still net bought nearly 14 trillion dong of government bonds on the secondary market.
