Fresh measures needed to support G-bond market
The Hanoi Stock Exchange (HNX) will coordinate with the State Treasury of Vietnam to boost this year's issuance of G-bonds.
During a recent conference on the Government bond market, HNX said it would also complete a scheme to develop the local corporate bond market that is expected to be operated in 2017.
The conference, with representatives of the Ministry of Finance (MoF), also sought solutions for market development in 2016 with focus on boosting technical issues on disclosure and reporting regimes to ensure convenient issuance of treasury bills and matching mechanisms.
The MoF recently announced the list of 21 permitted members who can bid in the G-bond market including securities companies, commercial banks and insurance companies.
Accordingly, four brokers are Vietcombank Securities, Vietnam Investment and Development Bank Securities, Bao Viet Securities and HCM City Securities Corporation. The Banks included ACB, ANZ Vietnam, BIDV and SCB, in addition to VietinBank, Lienvietpostbank, MB and Maritimebank.
The other banks are Sacombank, Techcombank, Vietcombank, and Tien Phong Bank, in addition to VIB, VP, and Bank for Agriculture and Rural Development of Viet Nam. Two insurance companies are Deposit Insurance of Vietnam and Social Insurance of Vietnam.
In December 2015, the ministry drafted the obligations and rights of members for the G-bond auction in 2016, in which members are obliged to tender a minimum participation of 60 percent of the G-bond auctions.
Of the total volume of G-bonds, all members must ensure that they purchase at least 50 percent of bonds with over five years among the total purchases.
According to bond experts, the issuance of G-bond will increase this year, especially with crude oil falling sharply influencing the budget, while the country still needs a large capital source for development.
Deputy Minister of Finance Tran Xuan Ha said recently that the task of the local G-bond market this year was to continue raising capital to support the government's debt restructuring with the majority of long-term bonds of over 5 years, to enhance the liquidity of the market and attract foreign investment and prepare the derivatives market.
While 85 percent of the G-bond consumers are commercial banks which mostly receive short-term deposits, they are expected to buy long-term bonds from the government, a representative at the conference said.
A representative said G-bonds contributed to the hike in interests for deposits in commercial banks, partly because of their purchase of G-bonds at the end of 2015. Recently, many commercial banks have increased deposit rates.
The conference, with representatives of the Ministry of Finance (MoF), also sought solutions for market development in 2016 with focus on boosting technical issues on disclosure and reporting regimes to ensure convenient issuance of treasury bills and matching mechanisms.
The HNX said it helped mobilise VND249.6 trillion (US$11.1 billion) in G-bonds in 2015, up 3.7 percent compared with 2014, adding that more insurance and retirement funds took part in the market instead of only commercial banks.
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Accordingly, four brokers are Vietcombank Securities, Vietnam Investment and Development Bank Securities, Bao Viet Securities and HCM City Securities Corporation. The Banks included ACB, ANZ Vietnam, BIDV and SCB, in addition to VietinBank, Lienvietpostbank, MB and Maritimebank.
The other banks are Sacombank, Techcombank, Vietcombank, and Tien Phong Bank, in addition to VIB, VP, and Bank for Agriculture and Rural Development of Viet Nam. Two insurance companies are Deposit Insurance of Vietnam and Social Insurance of Vietnam.
In December 2015, the ministry drafted the obligations and rights of members for the G-bond auction in 2016, in which members are obliged to tender a minimum participation of 60 percent of the G-bond auctions.
From November 1, 2015 to October 31, 2016, members are obliged to buy G-bonds at the minimum rates of VND2 trillion (US$89 million) for securities companies, VND3 trillion (US$133.6 million)) for branches of banks with 100 percent foreign capital, and VND4.3 trillion (US$191.4 million) for commercial banks, joint stock banks, joint venture banks.
Of the total volume of G-bonds, all members must ensure that they purchase at least 50 percent of bonds with over five years among the total purchases.
According to bond experts, the issuance of G-bond will increase this year, especially with crude oil falling sharply influencing the budget, while the country still needs a large capital source for development.
Deputy Minister of Finance Tran Xuan Ha said recently that the task of the local G-bond market this year was to continue raising capital to support the government's debt restructuring with the majority of long-term bonds of over 5 years, to enhance the liquidity of the market and attract foreign investment and prepare the derivatives market.
While 85 percent of the G-bond consumers are commercial banks which mostly receive short-term deposits, they are expected to buy long-term bonds from the government, a representative at the conference said.
A representative said G-bonds contributed to the hike in interests for deposits in commercial banks, partly because of their purchase of G-bonds at the end of 2015. Recently, many commercial banks have increased deposit rates.
As planned, the treasury will release VND76 trillion (US$3.38 billion) of G-bond in Q1 with 45 percent of bonds with a maturity of over 5 years.
