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Viet Nam’s local currency bond market up 5.1%: ADB

VGP - Viet Nam's currency bond market grew 5.1 percent quarter-on-quarter to reach a size of VND2,626.1 trillion (US$111.9 billion) at the end of March.

June 22, 2023 11:35 AM GMT+7
Viet Nam’s local currency bond market up 5.1%: ADB - Ảnh 1.

According to the Asia Bond Monitor report released by the Asian Development Bank (ADB) on June 21, growth can be attributed to expansions in both the government and corporate bond segments amid increased issuance during the quarter. 

Corporate bond market growth rebounded as the government eased some regulations, leading to the resurgence of issuance during the quarter. 

At the end of March, Viet Nam's local currency bond market remained dominated by Treasury and other government bonds, which together accounted for 67.8 percent of the total bonds outstanding, while a 28 percent share was attributable to corporate bonds and a 4.2 percent share was attributable to central bank securities.

Financial institutions and property firms are the largest issuers of corporate bonds in Viet Nam's local currency corporate bond market, accounting for 53.8 percent and 25.5 percent, respectively, of the total corporate bond stock at the end of March.

Bond yields in emerging East Asia declined from March to May amid easing inflationary pressure in the region and slower monetary tightening in the U.S., the report noted. 

Emerging East Asia comprises member economies of ASEAN; the People's Republic of China; Hong Kong (China), and South Korea.

The region's local currency bond stock grew 9.1 percent from a year earlier to US$23.8 trillion at the end of March.

The increase was largely driven by governments frontloading debt issuance to finance programs to support economic recovery. Corporate bond issuance remained moderate, partly due to higher interest rates. 

Growth in the sustainable bond market in emerging East Asia plus Japan moderated to 5.9 percent from the previous quarter, with total sustainable bond stock reaching US$633.9 billion at the end of March. 

The ASEAN+3 region remains the second-largest sustainable bond market in the world, even as it needs more local currency and long-term financing.

Green bonds, local currency financing, and private sector issuance dominated sustainable bond issuance in the region./.