return icon

COVID-19, dimmed global outlook weigh on bond market

The novel coronavirus (COVID-19) pandemic and deepening global economic uncertainty are putting great pressure on Viet Nam’s local currency bond...


The largest new corporate bond issue in the last quarter came from Asia Commercial Bank via a VND1.5 trillion 5-year bond. — Photo ACB



The novel coronavirus (COVID-19) pandemic and deepening global economic uncertainty are putting great pressure on Viet Nam’s local currency bond market, according to the Asian Development Bank (ADB).

In the latest issue of ADB’s Asia Bond Monitor released on Wednesday, ADB reported ten-year government bond yields and two-year government bond yields of Viet Nam declined 50 and 20 basis points between 31 December and 29 February, respectively.

According to ADB, the pandemic and deepening global economic uncertainty are also weighing heavily on local currency bond markets of other East Asian economies, including China, Hong Kong (China), Indonesia, Republic of Korea, Malaysia, Philippines, Singapore and Thailand.

“Financial markets in the region are already feeling the brunt of the effects of the COVID-19 pandemic, with foreign investment and sector activities on the downside, coupled with ongoing trade issues,” said ADB Chief Economist Yasuyuki Sawada.

“Efforts to cushion the negative impacts of the pandemic through stimulus packages and monetary measures to support affected households, businesses, and financial markets should continue.”

In emerging East Asia, all ten-year government bond yields and nearly all two-year government bond yields declined between 31 December and 29 February following a few policy rate cuts by central banks. Hong Kong (China) saw the largest declines in ten-year and two-year government bond yields at 77 and 51 basis points, respectively

According to the report, apart from emerging East Asia, government bond yields also declined in major advanced economies and select European markets between 31 December 2019 and 29 February 2020 as investors took a risk-averse approach and local industries lessened activities due to the global health situation. This resulted in equity market losses in the region, weakened currencies against the US dollar, and widening credit default swap spreads. Market selloffs, which were observed in some regional bond markets in January and February, will likely continue.

Several central banks in emerging East Asia have cut their policy rates to mitigate the economic impact of the COVID-19 pandemic, including mainland China, Thailand, Indonesia, Korea, Malaysia, Hong Kong and Viet Nam.

In March, the US Federal Reserve cut rates twice, leaving its interest rates near zero, along with other measures to support financial markets.

According to ADB, the size of Viet Nam’s local currency bond market slipped to VND1,241.1 trillion (US$53.6 billion) at the end of December, down 3.9 per cent quarter-on-quarter (q-o-q) but up 4.1 per cent year-on-year. The q-o-q decline was driven largely by the maturation of all outstanding central bank bills during the fourth quarter (Q4) of 2019.

New local currency corporate debt issuance totalled VND1.7 trillion in Q4 2019 on declines of 44.8 per cent q-o-q and 86.3 per cent year-on-year. The largest new corporate bond issue during the quarter came from Asia Commercial Joint Stock Bank via a VND1.5 trillion 5-year bond.

Viet Nam’s 31 largest local currency corporate bond issuers had aggregate bonds outstanding of VND97.7 trillion at the end of December, accounting for a 97.7 per cent share of the corporate bond stock. Vinhomes, a real estate services firm, continued to hold the top post at the end of Q4 2019 with outstanding bonds of VND12.5 trillion. — VNS


Amid global unrest, VN billionaires incur huge losses

Despite good news about the economy, including high growth rate and low inflation, stock prices have been sliding all over the globe.

Vietnam needs to expand airport network to relieve pressure on infrastructure

Vietnam ranks No.1 on the list of the 25 countries with the fastest post-pandemic recovery of the domestic aviation market.

Binh Duong lures foreign investors with special care

The southern province of Binh Duong has taken the lead for foreign direct investment (FDI) attraction thanks to its methods of taking care of investors.

Securities under pressure from external risks

Although the US Federal Reserve (FED) raised the interest rate in the hope of reducing inflationary pressure, it has come as a shock to see a rise in the core US inflation data, despite falling oil prices.

Unemployment rate falls, workers' incomes increase

According to the General Statistics Office's Report, the labor and employment situation in the third quarter of 2022 continued to recover.

The most expensive birds in Vietnam

Red-whiskered bulbs (Pycnonotus jocosus) with original colors are priced at VND500 million and tiny chickens with original colors sell for thousands of USD.

Drinks from dracontomelon: A popular heat-relieving drink in Hanoi

Sweet drinks made from ‘sau’, a fruit which is known scientifically as Dracontomelon, are a popular heat-relieving drink in Hanoi during the hot summer.

1,000 authors with doctoral degree or higher compiled textbooks for new academic year

As many as 1,574 authorities participated in compiling textbooks for six grades in accordance with the new general education program issued in 2018.

Expectations positive for growth trajectory

The Vietnamese economy has been gradually bouncing back thanks to the government’s major efforts to curb the pandemic and remove obstructions to progress for enterprises.

Law on Pharmacy needs to be amended

The lack of medicine at public hospitals has caused concern among the public. The Prime Minister has instructed the Ministry of Finance (MOF) and relevant ministries to find solutions to resolve the problem.

FIEs seek streamlined workforce policy

The human resources of Vietnam are improving to meet the demand of foreign-invested enterprises. However, they may require stronger policies on visas to enhance performance and transfer high technologies to Vietnam

US investors display confidence in Vietnam

Vietnam and the United States are seeking ways to increase their investment and trade ties, with the latter pledging to support the latter in education, training, and the energy transition.

Entrepreneurs blaze a trail in the city

Die-hard entrepreneurs are re-inventing themselves to solve business problems and find their niches in Ho Chi Minh City.

VN ranks 48th in Global Innovation Index 2022

Vietnam ranked 48th among the 132 economies featured in the Global Innovation Index 2022 (GII 2022).

Outstanding policies take effect in October 2022

A string of new policies on higher vehicle registration fee, termination of compulsory unemployment insurance premium, electronic identification and authentication and cybersecurity come into effect in October 2022.