G-bond market sees strong growth in 8M
Government bond issuance reached VND238.7 trillion ($9.04 billion).
Government debt repayment reaches nearly $3bln in Q1
Bond issuances an effective channel to mobilize capital.
Rapid public investment disbursement may put pressure on bond interest rates
The pressure to issue government bonds to fund public investment projects is not overly high so interest rates should increase slowly. However, according to some analysts, rates may increase faster as the pace of public investment disbursement increases from now to the end of the year.
Clear pressure to raise interest rates
Bidding on government bonds is at a low level, although registrations are 1.8-times higher than bids. At the same time, interbank interest rates have remained high. This shows that the pressure to increase interest rates is becoming increasingly clear, especially as the speed of public investment disbursement will gradually rise.
Pressure growing to increase primary government bond rate
The interest rate differential between the primary and secondary bond markets is widening. In addition, credit institutions are participating less in the government bond market due to concerns over high inflation as well as expectations of a new interest rate hike. The pressure to increase government bond interest rates in the primary market is therefore becoming clearer.
Over $1bln in government bond sold in January
More than VND23 trillion ($1.02 billion) was mobilized through the government bond channel in January. The State Treasury plans to issue VND105 trillion ($4.64 billion) worth in the first quarter of 2022. The MBS Securities Company believes that government bonds remain the first choice for those seeking liquid assets with fixed profitability, so even though yields are low, market absorption is still good.