Vietnam Bonds Decline on Speculation Bank Demand Low; Dong Gains

Vietnam’s government bonds declined on speculation demand from banks is dropping as the end of the year approaches. The dong strengthened.

Vietnam Development Bank, a state-owned lender that raises funds for government projects, is offering 1 trillion dong ($48 million) of three-year bonds and 900 billion dong of five-year notes today, according to a statement on the Hanoi Stock Exchange. The auction results will be available later today.

“Demand for bonds is pretty low these days since many banks have halted bond investment ahead of the year-end,” said Do Hoang Quynh Trang, a fixed-income trader at Hanoi-based Ocean Commercial Joint-Stock Bank.

The yield on the benchmark five-year bond climbed two basis points, or 0.02 percentage point, to 12.46 percent, according to a daily fixing price from banks compiled by Bloomberg. Three- year yields rose for a second day, adding four basis points to 12.50 percent.

The dong gained 0.1 percent to 20,982 per dollar, according to data from banks compiled by Bloomberg. The central bank set the reference rate at 20,813 per dollar, unchanged since Dec. 14, according to its website. The currency is allowed to fluctuate by as much as 1 percent on either side of that rate.

--Nguyen Dieu Tu Uyen. Editors: Andrew Janes, Sandy Hendry

To contact reporter on this story: Nguyen Dieu Tu Uyen in Hanoi at +84-4-936-6727 or uyen1@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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