Vietnam Bonds Post Biggest Weekly Gain Since 2009: Hanoi Mover

Vietnam Bonds Post Biggest Weekly Gain Since 2009: Hanoi Mover

VietFinanceNews.com - Vietnam’s benchmark five-year bonds rose, pushing the yield to the lowest level in two and a half years, on speculation banks increased purchases on surplus cash. The dong weakened.

The securities advanced for a 13th day, the longest winning streak since July 2006, and had their best weekly advance since October 2009. Local lenders had about 12 trillion dong ($575 million) of surplus funds as of April 17, Thoi Bao Kinh Te newspaper reported today, citing the National Financial Supervisory Commission.

“Demand is high now since banks have lots of idle cash,” said Tran Kieu Hung, a Hanoi-based bond trader at Bank for Investment & Development of Vietnam. “Compared with current overnight lending interest rates of as low as 3 percent in the interbank market, bond yields have become quite attractive.”

The yield on the five-year notes fell 26 basis points to 10.24 percent, according to a daily fixing rate from banks compiled by Bloomberg. That was the biggest one-day drop in two months and the lowest level since November 2009. The yield dropped 41 basis points, or 0.41 percentage point, this week.

The overnight interbank deposit rate at which banks lend to one another, a gauge of liquidity in the financial system, dropped 24 basis points to 4.30 percent today, according to data compiled by Bloomberg. The rate tumbled from 11.81 percent at the end of 2011.

The dong weakened 0.4 percent to 20,853 per dollar as of 5:04 p.m. in Hanoi, according to data compiled by Bloomberg. The currency strengthened 0.2 percent this week. The State Bank of Vietnam set the currency’s reference rate at 20,828, unchanged since Dec. 26, according to its website. The dong is allowed to trade as much as 1 percent on either side of the rate. (Bloomberg )

http://www.vietfinancenews.com/2012/05/vietnam-bonds-post-biggest-weekly-gain.html

So do we buy more vnd (dong)? Any thoughts here?

Personal choice