Investors bought more than 1.5 trillion VND (65.79 million USD) in G-bonds in the first five months. (Photo: baocongthuong.com.vn)
Hanoi (VNA) - The Ministry of Finance willstreamline regulations on Government bonds (G-bonds) issuance and simplifyprocedures for granting transaction codes to attract foreign investments in thecountry’s G-bond market, officials said.
Phan Thi Thu Hien, Director of the Department of Banking andFinancial Institutions under the Ministry of Finance, said the participation offoreign investors in the country’s G-bond market increased in 2017 compared to2015 figures. Foreign investors held 5 per cent of the country’s total G-bondsat the end of 2017 against 4.5 per cent at the end of 2015.
Data from the Hanoi Stock Exchange (HNX), which organisesG-bond auctions, also showed that foreign investors have been net buyers in thecountry’s G-bond market for the last two and a half years.
Investors bought more than 1.5 trillion VND (65.79 millionUSD) in G-bonds in the primary market in the first five months of this year.The value in the primary market for 2016 and 2017 stood at 20.8 trillion VNDand 10.3 trillion VND, respectively.
They also spent nearly 3 trillion VND for G-bonds in thesecondary market in the first five months of 2018, compared to 12.6 trillion VNDand 20.5 trillion VND in 2016 and 2017, respectively.
Chairwoman of the Vietnam Bond Market Association Nguyen ThiKim Oanh said net purchases made by foreign investors of Vietnamese G-bonds areproof that their confidence in the market has gradually improved.
However, Nguyen Thi Hoang Lan, HNX Deputy General Director,said the proportion of foreign investors participating in the G-bond market hasremained low, with their buying value accounting for only 5.3 percent of thetotal G-bond issue value in the primary market and 6.1 percent in the secondarymarket last year.
Lan said this proportion can be increased by requiringcompetent State agencies to start considering the interests of foreigninvestors to be able to offer incentives and ease the influx of investments.
Lan also said the country’s macroeconomic policies should bekept stable and consistent as foreign investors often look at macroeconomicindicators to decide whether to invest.
"The health of the economy is always a top priority forforeign investors when considering whether to purchase national bonds,"she said.
According to the HNX, G-bonds worth over 56 trillion VND havebeen successfully issued so far this year.
In May alone, 11.17 trillion VND was raised in 20 auctions,up 45.8 percent from the previous month.
Of which, five-year bonds offer an annual interest rate of2.97-3 percent, while bonds with 10-year, 15-year and 20-year maturity periodsoffering interest rates of 4.15 to 4.26 percent, 4.5 to 4.6 percent, and 5.14percent, respectively. Compared to the previous month, interest rates on5-year, 10-year, 15-year, and 20-year bonds were up 0.03, 0.16, 0.13 and 0.02percentage points, respectively.
The Government plans to issue G-bonds worth 200 trillion VNDthis year, with the focus being on long term maturity and keeping the interestrate at low levels.-VNA
VNA
