G-bond interest rates up again at May 6 auction

Hanoi (VNA) - The State Treasury of Vietnam raised 3.09 trillion VND (131.55 million USD) from G-bonds at an auction held by the Hanoi Stock Exchange (HNX) on May 6, with interest rates rising yet again.

A total of 4 trillion VND worth of bonds was up for auction, including 10-year and 15-year bonds valued at 1.5 trillion VND each and five-year and 20-year bonds valued at 500 billion VND each.

Some 90 billion VND was mobilised from five-year bonds with an annual interest rate of 2.2 percent, up 0.4 percent from the previous auction on January 8.

All the 10-year and 15-year bonds were sold for 1.5 trillion VND each with annual interest rates of 2.63 percent and 2.93 percent, respectively, up 0.13 percent and 0.08 percent against auctions on April 29.

There were no successful bids for the 20-year G-bonds.

G-bond interest rates on all terms have increased slightly since the beginning of March.

Interest rates were expected to keep heading upwards as the Government needed more funds to finance its socioeconomic development activities and support businesses and citizens hit hard by COVID-19, according to MB Securities.

“The demand for money will push the Government to raise bond yield rates to attract more investors,” it wrote in a report. “If rates do not improve, the ratio of sold-out bids will remain low.”

G-bond interest rates for ten-year and 15-year bonds hit record lows of 2.18 percent and 2.51 percent per annum in March. The ratio of sold bonds in March was equal to only 6 percent of the amount offered.

The State Treasury has raised over 39.14 trillion VND from G-bonds this year and expects a total of 300 trillion VND to be sold by the end of the year./.