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Vietnam’s Bonds Drop After Bank Executives Resign; Dong Steady

Sept. 20 (Bloomberg) -- Vietnam’s bonds declined, pushing the five-year yield to the highest level in two months, as the resignation of three Asia Commercial Bank executives highlighted concern about instability in the nation’s financial industry. The dong was steady.

The board at ACB, Vietnam’s biggest bank that isn’t owned by the government, approved the exits of Chairman Tran Xuan Gia and two vice-chairmen on Sept. 18, the lender said in a statement yesterday. Police arrested the bank’s co-founder Nguyen Duc Kien on Aug. 20 for allegedly “conducting business illegally” and subsequently detained former Chief Executive Officer Ly Xuan Hai for alleged economic mismanagement.

“Market sentiment is quite cautious now, given those arrests and resignations of bank officials,” said Hoang Thanh Tam, head of the fixed-income department at Vietnam Maritime Commercial Joint-Stock Bank in Hanoi. “Investors will hold off to see how these events impact the financial sector and the economy.”

The five-year yield rose three basis points, or 0.03 percentage point, to 10 percent, the highest level since July 19, according to a daily fixing rate from banks compiled by Bloomberg.

The dong traded at 20,870 per dollar as of 2:40 p.m. in Hanoi, compared with 20,875 yesterday, according to data compiled by Bloomberg. The central bank set its reference rate at 20,828, unchanged since Dec. 26, according to its website. The currency is allowed to trade as much as 1 percent on either side of the fixing.

To contact Bloomberg News staff for this story: Diep Ngoc Pham in Hanoi at dpham5@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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