Treasury bonds see modest transactions

Thursday, Sep 17, 2015 17:41

A woman checks bond documents. The volumes of successfully auctioned government bonds were modest during recent sessions. — Photo

HA NOI (Biz Hub) — The volumes of successfully auctioned government bonds were modest during recent sessions, Dien dan Doanh nghiep (The Business Forum) reported.

On September 16, the State Treasury auctioned VND1 trillion ($44.44 million) worth of 15-year bonds and VND2 trillion (US$88.88 million) worth of five-year bonds at the Ha Noi Stock Exchange.

It sold only VND613 billion ($27.24 million) worth of 15-year bonds, with a winning interest rate of 7.65 per cent per year. It reported no transactions for the five-year bonds as bid rates did not meet expectations.

On September 3, the Treasury also auctioned VND1 trillion worth of 10-year bonds and VND2 trillion worth of five-year bonds.

Only 7 per cent of the 10-year bonds, or VND70 billion ($3.11 million), was sold at an interest rate of 6.9 per cent per year. Some 12 per cent of the five-year bonds, or VND230 billion ($10.22 million), was traded at an annual rate of 6.45 per cent.

Industry insiders said recent fluctuations in the foreign exchange market would continue to impact investor sentiment in the bond market in the short term.

In an economic report for the first eight months of this year, the National Financial Supervisory Commission said the volumes of government bonds sold during auctions had fallen sharply following the central bank's move to devalue the dong.

While banks are likely to continue to expand loans, weak demand in the bond market is expected to force the bond interest rates to rise.

The Treasury has mobilised some VND96.12 trillion ($4.27 billion) through bond auctions this year. Its goal of mobilising VND250 trillion ($11.11 billion) worth of bonds this year will be a heavy task, industry insiders said. — VNS

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