VietNamNet Bridge – The Government bond market has expanded remarkably over the years with its current size quadrupling that in 2009, according to the Hanoi Stock Exchange (HNX).



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The scale of the bond market has risen considerably over the years

 

 

A report by HNX showed the secondary market has grown steadily to VND691.206 trillion worth of G-bonds, bonds guaranteed by the Government, municipal bonds and Treasury bills.

The market has expanded four times compared to 2009 and the size of transactions has kept growing. As of the end of last year, the trading value of bonds and Treasury bills totaled VND899.676 trillion, with bonds accounting for more than VND882 trillion, or 9.5 times over 2010.

Liquidity of the market improved and the average trading value last year reached over VND3.64 trillion per session compared to VND370 billion per session in 2010.

The report also pointed out G-bonds made up 72% of the total on the market, government-guaranteed bonds accounted for 22% and the remainder were municipal bonds and Treasury bills.

The primary market also surged, especially after HNX put into use the electronic bidding system.

The value mobilized via bidding soared from VND28.32 trillion in 2010 to VND167.6 trillion in 2012 and over VND240.8 trillion last year.

Last year, bonds of different terms were issued, with a focus on those of over five years.

The purchased volume of five- to 15-year bonds accounted for 50.9% of the total.

Between 2009 and 2014, over VND600 trillion worth of G-bonds were auctioned to raise funds for the State budget. However, according to the Vietnam Bond Market Association (VBMA), the market’s scale is still small compared regional countries.

The association said Vietnam’s bond market has total capitalization of some US$38 billion while the Philippine market is US$102 billion (37.6% of GDP), Thailand US$282 billion (76.3% of GDP) and South Korea US$1,758 billion (122.1% of GDP).

In addition, the proportion of the bond market on the Vietnamese financial market is quite modest in comparison with credit of the banking system (100% of GDP) and the stock market (31.5% of GDP), according to the association.    

SGT