VIETNAM BOND MARKET REPORT

Transcription

1 VIETNAM BOND MARKET ASSOCIATION On the 17th of, The State Treasury issued the Letter No. 565/KBNN-QLNQ on the Plan for Government bond issuance in According to the Letter, the total expected issuance amount in 2017 is VND183,300 billion. In, there were 3 government bond auctions in the primary market which helped the State Treasury raise VND16,877billion out of the VND20,650 billion offered. The offering/winning ratio rose to 81.7% from 60.6% last month. Total bond trading volume in February was VND118,612 billion, of which VND84,327 billion was outright and the other VND34,285 billion was repo. The daily average trading volume in February was VND6,243 billion/day. As of the end of, total outstanding value of Government bond, Governmentguaranteed bond and municipal bond is VND925,975 billion. The market share of Government bonds in total bond outstanding value was 82.38% or VND762,841billion, came next was Government-guaranteed bond with 15.32% or VND141,885 billion and the remaining 2.29% is municipal bond. Data from the VBMA Market Makers Chatroom indicated that Government bond yield fixing at the end of February went down markedly across all tenor compared to January. Specifically: bps with 1-year bond, bps in 2-year bond, bps in 3-year bond, bps in 5-year bond, bps in 7-year bond and -8.5 bps in 10-year bond.

2 PRIMARY MARKET The Plan for Government Bond Issuance in 2017 On the 17th of, The State Treasury issued the Letter No. 565/KBNN- QLNQ on the Plan for Government bond issuance in According to the Letter, the total expected issuance amount in 2017 is VND183,300 billion, classified by tenors as below: Less than 1 year VND billion 2-3 years: VND billion 5 years: VND billion 7 years: VND billion 10 years: VND5.000 billion 15 years: VND billion 20 years: VND billion 30 years: VND billion The State Treasury raised VND16,877 billion via bond auctions. The winning/offering rose to 81.7% from60.6% last month. In, there were 3 government bond auctions in the primary market which helped the State Treasury raise VND16,877billion out of the VND20,650 billion offered. The offering/winning ratio rose to 81.7% from 60.6% last month. Table 1: Government bond auction results in : No. bidding Bond code Tenors (years) Offering volume Winning volume Winning interest rate (%) Up/Down compared to the previous auction 1 22-Feb-2017 TD ,950 1, Feb-2017 TD ,600 2, Feb-2017 TD ,000 1, Feb-2017 TD ,500 1, Feb-2017 TD ,300 1, Feb-2017 TD ,300 1, Feb-2017 TD ,500 2, Feb-2017 TD ,500 3, Feb-2017 TD , Feb-2017 BVDB V i e t n a m B o n d M a r k e t A s s o c i a t i o n Page 2

3 11 21-Feb-2017 BVDB ,000 1, Feb-2017 BVDB ,500 1, Feb-2017 BVDB ,500 1, Feb-2017 BVDB Feb-2017 BVDB Feb-2017 BVDB ,500 1, Feb-2017 BVDB ,000 2, Figure 1: Offering and winning volume of Government bond in the last 13 months % % 70.7% 84.0% 86.7% 82.2% 71.9% 94.6% 81.7% 96.5% 90.0% 81.7% 70.0% % 46.5% 60.6% 50.0% % % Feb March April May June July August Sept Oct Nov Dec Jan Feb Winning volume Offering volume Winning/Offering ratio -10.0% Table 2: Bond auctions result in, classified by tenors. No. Tenors Offering amount Winning amount Winning/Offering ratio 1 5 Năm 9,000 6, % 2 7 Năm 5,100 5, % 3 10 Năm 1,300 1, % 4 15 Năm 1,950 1, % 5 30 Năm 3,300 1, % Total 20,650 16, % In the first 2 months of 2017, the State Treasury raised VND26,909 billion from Government bond auction at HNX, accomplishing 41.4% of the issuance plan for the first quarter of 2017 and 14.7% of the plan of the entire year. V i e t n a m B o n d M a r k e t A s s o c i a t i o n Page 3

4 Government Bond Payment Calendar in March Table 3: Government Bond Payment Calendar in March 2017 Bond Code Issue Maturity Payment Winning rate (%/year) Principal (VND billion) Interest (VND billion) Total Payment TP1A Mar Mar Mar TD Mar Mar Mar TD Mar Mar Mar , , TD Mar Mar Mar , , TD Mar Mar Mar TD Mar Mar Mar TD Mar Mar Mar TD Mar Mar Mar , , Corporate Bond VIX plans to issue VND600 billion corporate bond Source: VBMA IB Securities Corporation (VIX) announced that the company will issue VND600 billion inconvertible and unsecured bond. The bond will have tenor from 1 to 3 years, coupon rate will be no higher than 12%/year in the first year, adjustable once every six months and equal to the average deposit rate of 4 SOCBs plus 4%/year, paying interest rate once every 6 months. MBS plans to issue VND700 billion corporate bond MB Securities Corporation (MBS) approved the plan to issue VND700 billion inconvertible bond in The bond s tenor will be no higher than 3 years, pay coupon once every year, coupon rate in the first year will be fixed, the following year floating. V i e t n a m B o n d M a r k e t A s s o c i a t i o n Page 4

5 SECONDARY MARKET The total trading volume in February was VND118,612 billion Total bond trading volume in February was VND118,612 billion, of which VND84,327 billion was outright and the other VND34,285 billion was repo. The daily average trading volume in February was VND6,243 billion/day. Figure 2: Trading value in the last 13 months 140, , ,000 80,000 60,000 40,000 20, ,621 74,122 45,579 85,040 82,280 82, , , ,288 90,800 96,380 84,327 67,410 Feb March April May June July August Sept Oct Nov Dec Jan Feb Table 5: Bonds with largest volume of outright trading in. No. Bond Code Issuance date Initial tenors (Years) Trading value (VND billion) 1 TD /06/ years 4,559 2 TD /12/ years 3,656 3 TD /01/ years 3,423 4 TD /08/ years 3,075 5 TD /04/ years 3,046 6 TD /11/ years 2,209 Total 19,968 The total trading value of the above 6 bonds alone accounted for 23.3% of all outright Government bond trading in February. Government bonds account for the large majority of total bond outstanding. As of the end of, total outstanding value of Government bond, Government-guaranteed bond and municipal bond is VND925,975 billion. The market share of Government bonds in total bond outstanding value was 82.38% or VND762,841billion, came next was Government-guaranteed bond with 15.32% or VND141,885 billion and the remaining 2.29% is municipal bond. V i e t n a m B o n d M a r k e t A s s o c i a t i o n Page 5

6 Figure 3: Outstanding bond value market share at the end of : 2.29% 15.32% Government bond 82.38% Gov'-guaranteed bond Municipal bond Movements of VBMA s Government Bond Yield Fixing in Data from the VBMA Market Makers Chatroom indicated that Government bond yield fixing at the end of February went down markedly across all tenor compared to January. Specifically: bps with 1-year bond, bps in 2-year bond, bps in 3-year bond, bps in 5-year bond, bps in 7-year bond and -8.5 bps in 10-year bond. Figure 4: VBMA Gov Bond Yield Fixing Curve at the end of December 2016, January and February % 7.00% 6.50% 6.00% 5.50% 5.00% 4.50% 4.00% 3.50% 1y 2y 3y 5y 7y 10y 15y December % % % % % % January % % % % % % February % % % % % % % Source: VBMA V i e t n a m B o n d M a r k e t A s s o c i a t i o n Page 6

7 Figure 5: Movement of VBMA Gov Bond yield fixing from February 2016 to. 7.50% 7.00% 6.50% 6.00% 5.50% 5.00% 4.50% 4.00% 1y 2y 3y 5y 7y 10y 15y 3.50% 3.00% Source: VBMA Thank you for reading VBMA s Monthly Bond Market Report. For more information, please contact: VIETNAM BOND MARKET ASSOCIATION 14th Floor, Tower A Vincom, 19 Ba Trieu Str.,Hai Ba Trung Distr., Ha Noi Tel: (84) Fax: (84) Website: Disclaimer: The information and opinions in this report are those of Vietnam Bond Market Association (VBMA) research activity. VBMA does not make any representation or warranty, express or implied, as to the fairness, accuracy, or completeness. While all reasonable care has no representation as to its accuracy or completeness and it should not be relied upon as such. VBMA accepts no liability whatsoever for any loss arising from use of this report or its contents. This report is being supplied solely for informational purposes and may not be reproduced, distributed or published by recipient for any purpose. V i e t n a m B o n d M a r k e t A s s o c i a t i o n Page 7