Vietnam local currency bond markets grows 3.9% in Q3, yields up

By Anh Minh
Tue, November 28, 2023 | 7:34 am GMT+7

Vietnam’s local currency (LCY) bond market grew 3.9% quarter-on-quarter in the third quarter, driven by the State Bank of Vietnam (SBV) resuming issuance of treasury bills.

To mop up excess liquidity in the banking system and help stabilize the foreign exchange market, the central bank resumed its issuance of T-bills in September (VND93.8 trillion or $3.86 billion) after a break since March 2023.

The Asian Development Bank (ADB) said in its latest Asia Bond Monitor edition that Q3 growth in outstanding government bonds slowed to 1.5% quarter-on-quarter, lower than the 3.3% quarter-on-quarter growth in Q2 due to the low volume of maturities and a decline in issuance.

Despite strong issuance, corporate bonds contracted 3.1% quarter-on-quarter, given the large volume of maturities.

Composition of local currency bonds outstanding in Vietnam. Source: ADB's Asia Bond Monitor, Novemmber edition.

Composition of local currency bonds outstanding in Vietnam. Source: ADB's Asia Bond Monitor, Novemmber edition.

Meanwhile, Vietnam’s LCY government bond yields climbed across all tenors between September 1 and November 10 due to an uptick in inflation and the U.S.Federal Reserve’s decision to keep interest rates at a 22-year high, the ADB note said.

Increased issuance by corporates drove total LCY value up 144.6% quarter-on-quarter to VND198.1 trillion ($8.15 billion) in Q3/2023.

Corporate bond issuance climbed more than threefold in Q3/2023 from the previous quarter. A major factor in this growth was Vietnamese banks increasing their issuance after the government issued two circulars in April which removed some bottlenecks in debt payment rescheduling and bond repurchases.

The banking sector accounted for 59% of the total LCY corporate bonds issued in Q3, with the largest issuance coming from Asia Joint Stock Commercial Bank on aggregated debt sales of VND13.5 trillion ($556 million).

On the other hand, issuance of government bonds contracted 21.6% quarter-on-quarter with some auctions not fully awarded.

Insurance firms and banks remain the largest local currency government bond holders in Vietnam. Photo courtesy of Vietnam Finance Review

Insurance firms and banks remain the largest local currency government bond holders in Vietnam. Photo courtesy of Vietnam Finance Review

As of September, insurance firms and banks continued to hold nearly all outstanding LCY government bonds in the domestic market. Collectively, their bond holdings accounted for 99.6% of the total, up from 99.4% in the same period a year earlier.

Insurance companies remained the single-largest investor group, despite their holdings declining to 59.7% at the end of September from 60.5% a year earlier. Meanwhile, the holdings of banks increased to 39.9% from 38.9% in the same period. Securities companies and investment funds, nonresidents and other investors held a marginal aggregate share of 0.4%.

Comments (0)
  • Read More
Vietnam offers numerous advantages for Skoda Auto's investment: executive

Vietnam offers numerous advantages for Skoda Auto's investment: executive

Vietnam offers a range of advantages for investment by Czech automaker Skoda Auto, including its seaport system, logistics infrastructure, and skilled labor, the company’s chairman and CEO Klaus Zellmer said on Thursday.

Industries - Fri, March 28, 2025 | 7:33 pm GMT+7

Vietnam plans to cut import tax for LNG to 2%

Vietnam plans to cut import tax for LNG to 2%

Vietnam’s Ministry of Finance is drafting a decree on preferential import tax for some products, including a proposal of 2% tax rate for LNG.

Energy - Fri, March 28, 2025 | 4:31 pm GMT+7

AES’s $2.1 bln LNG power project needs solutions to meet deadline: Vietnam authorities

AES’s $2.1 bln LNG power project needs solutions to meet deadline: Vietnam authorities

The 2,250-MW Son My 2 LNG-fired power project, invested by the U.S.'s AES and state-run Petrovietnam subsidiary PV Gas, “needs solutions” to meet its deadline.

Energy - Fri, March 28, 2025 | 4:06 pm GMT+7

Over $9 bln pledged for investment projects in central Vietnam province Binh Dinh

Over $9 bln pledged for investment projects in central Vietnam province Binh Dinh

Binh Dinh province on Friday handed over MoUs on investment cooperation, in-principle approvals and investment registration certificates to 62 projects worth over VND231 trillion ($9.03 billion).

Industries - Fri, March 28, 2025 | 4:05 pm GMT+7

Vietnam's giant Vingroup eyes mullti-billion-dollar renewable, LNG power projects

Vietnam's giant Vingroup eyes mullti-billion-dollar renewable, LNG power projects

Vietnam's leading private conglomerate Vingroup is seeking the government's permission to develop seven renewable energy projects worth $20-25 billion and a $5.5 billion LNG-fired power project from 2025-2030.

Energy - Fri, March 28, 2025 | 1:09 pm GMT+7

While the buzz around a market upgrade is back, who is this milestone for?

While the buzz around a market upgrade is back, who is this milestone for?

A key issue for the Vietnamese stock market is the underdevelopment of the institutional investor base. The dominance of retail investors can create heightened volatility, which, in turn, reduces the incentive for high-quality companies to list on the stock exchange, writes Gary Harron, head of securities services at HSBC Vietnam.

Consulting - Fri, March 28, 2025 | 10:31 am GMT+7

Vietnam's private lender VIB seeks strategic shareholders: chairman

Vietnam's private lender VIB seeks strategic shareholders: chairman

Vietnam International Bank's (VIB) board of directors is now in discussions with banks and investment funds to find suitable partners for the lender, ensuring a mutually beneficial partnership that goes beyond finance.

Banking - Fri, March 28, 2025 | 8:31 am GMT+7

Vietnam tech giant FPT opens semiconductor R&D center in central Vietnam

Vietnam tech giant FPT opens semiconductor R&D center in central Vietnam

Vietnam’s leading tech group FPT on Thursday inaugurated its high-tech and semiconductor R&D center at the Danang Software Park No. 2 in the central city of Danang.

Industries - Fri, March 28, 2025 | 8:00 am GMT+7

HCMC's international financial center development to be phased out: city leader

HCMC's international financial center development to be phased out: city leader

Ho Chi Minh City aims to become an international financial center, with related development plan divided into three phases, said Vo Van Hoan, its Vice Chairman.

Economy - Thu, March 27, 2025 | 11:11 pm GMT+7

Car producers in Thailand postpone export models

Car producers in Thailand postpone export models

Car manufacturers in Thailand have decided to delay making some models for export due to U.S. President Donald Trump's new tariff policy.

Southeast Asia - Thu, March 27, 2025 | 10:17 pm GMT+7

Indonesia approves $7 bln budget for food security in 2025

Indonesia approves $7 bln budget for food security in 2025

Indonesia’s Ministry of Finance on Wednesday announced that the government has approved a budget of IRD118 trillion ($7.1 billion) for food security programs in 2025.

Southeast Asia - Thu, March 27, 2025 | 10:14 pm GMT+7

Honda Vietnam rolls out first domestically produced electric scooter

Honda Vietnam rolls out first domestically produced electric scooter

Honda Vietnam has officially launched its first domestically produced electric scooter, the ICON e:, marking a significant step in the company’s electrification and sustainable mobility strategy in Vietnam.

Southeast Asia - Thu, March 27, 2025 | 10:09 pm GMT+7

Vietnam's Quang Ngai seaport system requires over $420 mln investment by 2030

Vietnam's Quang Ngai seaport system requires over $420 mln investment by 2030

The seaport system in the central Vietnam province of Quang Ngai will need about VND10.83 trillion ($423.54 million) in investment by 2030, according to the detailed 2021-2030 development plan for local seaport land and water areas, with a vision to 2050.

Southeast Asia - Thu, March 27, 2025 | 10:06 pm GMT+7

Leading steelmaker Hoa Phat targets record revenue on partial operation of central Vietnam plant

Leading steelmaker Hoa Phat targets record revenue on partial operation of central Vietnam plant

Hoa Phat Group, Vietnam’s top steelmaker, targets a record-high revenue in 2025, driven by the expected partial operation of a steel and iron complex in the central region this year.

Companies - Thu, March 27, 2025 | 8:10 pm GMT+7

Offshore wind power developer CIP seeks long-term cooperation with Vietnam

Offshore wind power developer CIP seeks long-term cooperation with Vietnam

Copenhagen Infrastructure Partners (CIP), a major Danish renewable energy developer, is seeking to reach long-term cooperation with Vietnamese businesses in the offshore wind power sector.

Energy - Thu, March 27, 2025 | 4:16 pm GMT+7

Vietnam giant VinFast moves to expand EV service in Philippines

Vietnam giant VinFast moves to expand EV service in Philippines

VinFast, Vietnam’s largest electric vehicle (EV) manufacturer, has partnered with MGA.414 Corporation, the operator of the JIGA automotive service chain, to expand its EV service network in the Philippines.

Southeast Asia - Thu, March 27, 2025 | 3:48 pm GMT+7