Market Summary

Yield Movements

The yields of local currency (LCY) government securities in Viet Nam fell across the curve between 31 August and 30 October. Yields on bonds with 1-year and 2-year maturities dropped 14 basis points (bps) and 10 bps, respectively, while yields on bonds with tenors from 3 years to 15 years had larger declines ranging from 31 bps to 50 bps. A low-interest-rate environment and abundant liquidity in the financial system, as a result of the State Bank of Vietnam's accommodative monetary policy stance, and easing inflation drove the downward movement of the yield curve.

Size and Composition

Viet Nam's LCY bond market grew 11.6% quarter-on-quarter (q-o-q) in the third quarter, recovering strongly from a decline of 1.4% q-o-q in the second quarter. Total bonds outstanding registered VND1,514.3 trillion (USD65.3 billion) at the end of September, supported by the government segment which grew 9.1% q-o-q on the back of increased issuance from the State Treasury, and by the corporate segment which expanded 26.9% q-o-q. On an annual basis, LCY bonds outstanding increased 17.0% year-on-year. The LCY bond market comprised 83.8% government bonds and 16.2% corporate bonds.

Policy, Institutional and Regulatory Developments

On 14 August, the Ministry of Finance issued Circular No. 77/2020/TT-BTC to provide guidance on its existing decrees, Decree No. 81/2020/ND-CP and Decree No. 163/2018/ND-CP, on the provision of bond issuance information in the domestic market. In particular, the circular guides the (i) information disclosure regime of bond issuers; (ii) information disclosure on the corporate bond website; and (iii) reporting regime of the stock exchange, corporate bond issuance consulting organizations, and bond depository organizations.