Viet Nam: Market Summary
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Market Summary
Yield Movements
Local currency (LCY) government bond yields in Viet Nam fell for most tenors, with yields declining an average of 6 basis points between 1 June and 30 August. Decline in yields was influenced by heightened anticipation of a policy rate cut by the United States Federal Reserve in September. Furthermore, the State Bank of Vietnam loosened its monetary measures and reduced its interest rate for central bank bills three times in August.
Local Currency Bond Market Size and Issuance
At the end of the second quarter (Q2) of 2024, Viet Nam's LCY bond market contracted 3.7% quarter-on-quarter (q-o-q) to VND2,760.4 trillion due to a high volume of maturities of corporate bonds and central bank securities. The corporate bond segment contracted 0.8% q-o-q despite increased issuance. Conversely, outstanding treasury and other government bonds grew 2.2% q-o-q, due to a small volume of matured bonds. Tepid issuance from the government and central bank pushed the LCY bond issuance to decline 29.4% q-o-q in Q2 2024.
Sustainable Bond Market
The corporate sector remained the sole issuer of sustainable bonds in Viet Nam, which reached a total size of USD0.8 billion at the end of June. The market was mainly composed of green and sustainability bond instruments denominated in foreign currency and carrying tenors of 1 to 3 years. Nearly 80.0% of sustainable bonds carried maturities of 3 years or less at the end of Q2 2024, resulting in a size-weighted average tenor of 2.9 years.