HA NOI — The Ha Noi Stock Exchange launched a treasury bill trading system yesterday in co-ordination with the State Treasury, the State Bank of Viet Nam and the Viet Nam Securities Depository. The system will allow treasury bills to be sold via bidding through the State Bank, deposited at the depository centre, and listed on the exchange's bond trading board.
"With a maturity of less than one year, suitable to currency trading activities of commercial banks, treasury bills are expected to become very alluring," said the exchange's general director, Tran Van Dung.
The introduction of treasury bills onto the bond market would not only offer benefits to investors but also give agencies an effective tool in managing the market, he added.
Listing T-bills would help overcome the segmentation between short – and long-term capital markets.
With the bills listed starting yesterday, the exchange would be in a position to improve the benchmark yield curve for bonds in order to provide more comprehensive and diverse information for investors and monetary policymakers, Dung said.
A number of banks, including VPBank and Military Bank, have also suggested that the secondary market in T-bills would not only offer safe investments but would also help create a standard yield level for the monetary market.
Depository Centre deputy director Tran Minh Hang noted that the liquidity of T-bills had previously been limited, and she hoped the new system would boost the liquidity of both T-bills and the bond market in general. The settlement of bills would be made by multilateral clearing, with a transaction-plus-one-day (T+1) payment date, Hang said.
With treasury bills totalling VND10 trillion (US$476 million) and listed Government bonds having a value of VND337.9 trillion ($16 billion) last year, the public debt market now accounted for 14 per cent of gross domestic product, noted Deputy Minister of Finance Tran Xuan Ha.
"The ministry is now focused on developing the Government bond market – a key to financial market restructuring," Ha said.
Dragon Capital director Dominic Scriven recommended administrative agencies offer favourable conditions for foreign investors to buy T-bills, e.g., tax exemptions for bond and T-bill investments. He said that there should be no interference in the yields in order to accurately reflect the cost of capital in light of inflation and monetary policy. — VNS