Vietnam will likely launch its bond derivatives market in Q1 of 2017 (Source: cafef.vn) Hanoi (VNA) - Vietnam will likely launch its bond derivatives market inthe first quarter of this year. This is part of the four-year roadmap for thedomestic bond market prepared by the Ministry of Finance and projected to besubmitted to the Prime Minister this year.
Thedevelopment of the derivatives market is part of the Government’s strategy tosupport the country’s stock market by providing more instruments to hedge risksand attract more investment.
Accordingto the announcement by the Hanoi Stock Exchange in June 2016, the derivativesmarket will initially start with stock index and government bond (G-bond)futures.
Thelocal G-bond market witnessed positive performance last year with total amountraised through the Hanoi Stock Exchange hitting a record 316.73 trillion VND (14billion USD), a rise of 26.9 percent compared to the previous year, thenorthern exchange reported in the bond market review last week.
G-bondsoutstanding have reached 26 percent of the country’s GDP as of December 31,2016.
Theparticipation of foreign investors increased in both transaction value andinvestor structure. They accounted for 12.4 percent of total buyers, up 8.4 percentover the previous year, while their transaction value rose 88 percentyear-on-year.
Thetotal listing value of G-bonds reached 930.53 trillion VND, up 23.5 percentover 2015. The average maturity extended to 5.21 years in 2016.
Transactionson the secondary markets also improved with total value rising 73.8 percentover the previous year, averaging 6.35 trillion VND per session.
TheMinistry of Finance has set the mobilisation target of 250 trillion VND worthof G-bond issuance in 2017.
Thefinance ministry plans to submit the 2017-20 roadmap for the local bond marketto the Prime Minister this year. Following which, it will enhance co-ordinationbetween fiscal and monetary measures to better regulate the financial market.
Inthe primary market, a pilot project of issuing floating rate G-bonds will beimplemented from the second quarter of 2017. The ministry will continue toissue notes with long terms of 20 years and 30 years.
Inthe secondary market, the bond derivatives market will be launched in the firstquarter and settlement function will be transferred to the central bank.
Ina move to develop the corporate bond market, a database for corporate bondswill be built to improve transparency in the market.
TheState Treasury has announced it will diversify maturity of its G-bonds thisyear by between below one year to 30 years, focusing on the long term to extendthe average maturity and reduce the pressure on the Government’s debt paymentin the short term.
Five-yearto 10-year bonds will account for 60 percent of total issuance while 1-3 yearterms and 15-year terms onwards will each make up 20 percent of totalissuance.-VNA
Thedevelopment of the derivatives market is part of the Government’s strategy tosupport the country’s stock market by providing more instruments to hedge risksand attract more investment.
Accordingto the announcement by the Hanoi Stock Exchange in June 2016, the derivativesmarket will initially start with stock index and government bond (G-bond)futures.
Thelocal G-bond market witnessed positive performance last year with total amountraised through the Hanoi Stock Exchange hitting a record 316.73 trillion VND (14billion USD), a rise of 26.9 percent compared to the previous year, thenorthern exchange reported in the bond market review last week.
G-bondsoutstanding have reached 26 percent of the country’s GDP as of December 31,2016.
Theparticipation of foreign investors increased in both transaction value andinvestor structure. They accounted for 12.4 percent of total buyers, up 8.4 percentover the previous year, while their transaction value rose 88 percentyear-on-year.
Thetotal listing value of G-bonds reached 930.53 trillion VND, up 23.5 percentover 2015. The average maturity extended to 5.21 years in 2016.
Transactionson the secondary markets also improved with total value rising 73.8 percentover the previous year, averaging 6.35 trillion VND per session.
TheMinistry of Finance has set the mobilisation target of 250 trillion VND worthof G-bond issuance in 2017.
Thefinance ministry plans to submit the 2017-20 roadmap for the local bond marketto the Prime Minister this year. Following which, it will enhance co-ordinationbetween fiscal and monetary measures to better regulate the financial market.
Inthe primary market, a pilot project of issuing floating rate G-bonds will beimplemented from the second quarter of 2017. The ministry will continue toissue notes with long terms of 20 years and 30 years.
Inthe secondary market, the bond derivatives market will be launched in the firstquarter and settlement function will be transferred to the central bank.
Ina move to develop the corporate bond market, a database for corporate bondswill be built to improve transparency in the market.
TheState Treasury has announced it will diversify maturity of its G-bonds thisyear by between below one year to 30 years, focusing on the long term to extendthe average maturity and reduce the pressure on the Government’s debt paymentin the short term.
Five-yearto 10-year bonds will account for 60 percent of total issuance while 1-3 yearterms and 15-year terms onwards will each make up 20 percent of totalissuance.-VNA
VNA
