Government Bond Interest Rate plunges

	Take advantage of the favorable market for governmental bond issuance
	State Treasury flexible in managing volume of government bond issuance in 2023
	VND108 trillion of government bonds to be issued in Q1

The interest rate of winning bids in March continued to decrease for all terms. Illustrative photo: Internet.

The total value of winning bids reached VND35,446 billion, meeting 69.5% of the bid value. In the first quarter of the year, the State Treasury mobilized VND104,873 billion, reaching 97.1% of the plan for the first quarter and 26.22% of the annual plan.

Notably, in the first quarter of 2023, the State Treasury offered five-year bonds, seven-year bond, 10-year bonds, 15-year bonds, 20-year and 30-year bonds.

The 10-year and 15-year bonds were won the most. However, the proportion of winning bids decreased by 32.99% and 41.88% of the total value compared with February, respectively.

The interest rate of winning bids in March continued to decrease in all terms. At the auction at the end of March, the interest rate of winning bids of five-year bonds, seven-year bond, 10-year bonds, 15-year bonds, 20-year and 30-year bonds were 2.93%, 3.8%, 3.45%, 3.6%, 3.75% and 3.8%, respectively. Thus, the interest rate of winning bids declined by about 40 to 76 basis points or 0.4% compared to the first session of the month.

On the secondary market, the bond trading value in March increased by 10.46% to VND 123,149 billion compared with the previous month with an average of VND5,354 billion/session. Outright transactions accounted for 68.94% of the total trading value of the whole market, the rest were Pepos transactions.

According to HNX, in the first three months of 2023, the total transaction value of government bonds reached VND291,429 billion, the average trading session rose 40.5% to VND4,939 billion compared to the fourth quarter of 2022.

The average trading yield of 10-15-year government bonds and 25-30-year government bonds rose 17.45% and 13.54%, respectively, compared with the same period in the previous year; the current average trading yield is about 4.18% and 4.88%, respectively.

The average trading yield of 3-year government bonds and 1-year and 5-year government bonds dropped by 10.24%, 7.95% and 7.55%, respectively over the same period last month, the current average trading yield of about 3.6%, 3.66% and 3.47%, respectively.

10-year government bonds and 15-year government bonds and seven-year bonds were the most traded bonds in the month with a total trading value of the whole market of 23.96%, 18.38% and 12.26%, respectively.

In March 2023, the transaction market share of the commercial banking sector accounted for 66.94% and 96.72% of Outright and Repos transactions of the whole market, and the securities company sector was 33.0%, 0.06% and 3.28%.