Bond indices to be launched in near future

HA NOI (Biz Hub) — A new set of indices will be created for Government bonds, officials announced at a meeting last week organised by the Ha Noi Stock Exchange, the State Treasury and the Viet Nam Bond Market Association.

Initially, the index would be based on bonds issued by the State Treasury as these are "the commodities with the lowest risk and are a reference for investors to price other bonds in the market," according to exchange officials.

The exchange is likely to launch more bond indices such as a Government-guaranteed bond index, municipal bond index and bond liquidity index in the near future.

The bond market has achieved remarkable results in developing a legal framework, market size and infrastructure. Bond issuance continued to increase: a total of VND421 trillion (US$19.8 billion) were purchased as of September this year. The proportion of bonds successfully finding buyers increased from 32 per cent in 2010 to 52 per cent last year and reached 53 per cent during the first three quarters of this year.

Trading was also conducted on an increasingly large scale: the highest bidding session hit more than VND2 trillion ($94.3 million). After the exchange applied a new bond trading system, the average scale per session reached VND1.7 trillion ($80.1 million), rising by 4.5 times compared to 2010. — VNS