Wednesday, May 23, 2012

Vietnam Five-Year Bonds Decline as Supply May Exceed Demand




Vietnam’s benchmark five-year bonds fell for a second day on speculation the supply of new securities may exceed demand, prompting the government to accept higher yields. The dong was steady. 

The State Treasury will offer 10 trillion dong ($480 million) of bonds at an auction on May 29, according to a statement on Hanoi Stock Exchange’s website today. Vietnam Development Bank, a state-owned lender, will offer 5 trillion dong of three- and five-year debt on May 25. 

“Supply is increasing,” said Hoang Thanh Tam, head of the fixed-income department at Vietnam Maritime Commercial Joint- Stock Bank in Hanoi. “People want to take profits right now.” 

Five-year yields rose four basis points, or 0.04 percentage point, to 9.69 percent, according to a daily fixing rate from banks compiled by Bloomberg. That’s the highest level since May 8. Yields have fallen 286 basis points this year. 

The dong traded at 20,850 per dollar as of 5:50 p.m. in Hanoi, the same as yesterday, according to data compiled by Bloomberg. The State Bank of Vietnam 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.

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