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Over VND 36,000 Billion Raised Through Government Bond Auctions
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In July 2024, the Hanoi Stock Exchange organized 20 auctions of government bonds issued by the State Treasury, raising a total of VND 36,512 billion. The State Treasury offered bonds with five different maturities: 5, 10, 15, 20, and 30 years. However, the majority of the successful bids were for the 10-year bonds, accounting for 82% of the total volume.
Interest rates for government bonds issued in July showed a slight increase compared to the end of June, with the 10-year bond rate rising by 0.02%, the 15-year bond rate increasing by 0.1%, and the 5-year bond rate going up by 0.09%. The auction results for the last session of July showed interest rates of 1.94%, 2.76%, 2.96%, and 3.10% for the 5-year, 10-year, 15-year, and 30-year bonds, respectively.
As of July 31, 2024, the total value of government bonds listed on the secondary market reached VND 2,101,301 billion, reflecting a 1.28% increase compared to the previous month.
The total value of government bond transactions in July amounted to VND 262,765 billion, with an average transaction value of VND 11,425 billion per session, representing a 19.94% decrease from June.
The most actively traded maturities in July were the 10-15 year, 10-year, and 5-7-year bonds, accounting for 20.91%, 17.35%, and 14.98% of the total transaction value in the market, respectively.
During July, the average yield of government bonds issued by the State Treasury decreased the most for the 3-5-year and 2-year maturities, reaching approximately 1.49% and 1.196%, respectively. The maturities that witnessed the highest increase in average yield were the 7-10-year and 15-year bonds, with average yields of around 2.872% and 2.88%, respectively.
Commercial banks continued to dominate the market in terms of investor composition.
Foreign investors accounted for 1.7% of the total transaction value in July, with a net selling value of VND 559 billion, representing a 0.5% decrease compared to the previous month.
The Ministry of Finance also provided information on the corporate bond market. In July 2024, there were 56 successful private placements of corporate bonds, totaling VND 45,000 billion in value. This reflects a 15% decrease compared to June 2024 but a significant 57% increase from the same period in 2023.
Breaking down the issuance by type of issuer, credit institutions accounted for VND 35.1,000 billion (78% of the total issuance), followed by real estate companies with VND 5.5,000 billion (12.1%), and other sectors with approximately VND 4.4,000 billion (9.9%).
In terms of collateralized bonds, VND 6.3,000 billion (14% of the total issuance) were issued with guarantee clauses. Of these, real estate companies’ bonds with guarantee clauses accounted for 86.5%.
For the first seven months of 2024, there were 174 successful private placements of corporate bonds, totaling VND 161.5,000 billion in value, more than double the volume from the same period in 2023.
Credit institutions led the issuance during this period, with over VND 109,000 billion (67.5% of the total issuance), followed by real estate companies with nearly VND 38.7,000 billion (24%), and other sectors with approximately VND 13.8,000 billion (8.5%).
Regarding collateralized bonds, VND 24,000 billion (14.9% of the total issuance) were issued with guarantee clauses. Real estate companies’ bonds with guarantee clauses accounted for 84.4% of this amount, while credit institutions’ bonds were not collateralized.
The volume of bonds repurchased before maturity decreased by 36% compared to the same period in 2023, reaching VND 88.8,000 billion.
Turning to the secondary market, according to the Hanoi Stock Exchange, the total transaction value for the first seven months of 2024 reached VND 566,857 billion, with an average transaction value of approximately VND 4,049 billion per session.
Looking back at the 2023 bond market: A tumultuous year filled with a wide range of emotions
The year 2023 has come to an end, marking a “bleak” year for the corporate bond market. In contrast, the government bond market has shown resilience as many investors return to long-term investments.
