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Banks tipped to be active in Government bond auctions

Update: December, 08/2012 - 09:03

HA NOI (VNS)— Commercial banks with abundant capital sources due to slow credit growth are expected to play a more active role in Government bond auctions.

"The liquidity of most banks remains healthy and this will have a positive influence on the primary market," analysts from Bao Viet Securities Co (BVSC) wrote in a report.

"Market participators forecast the deposit interest rate will be lowered in the near future, and macroeconomic factors are supporting this possibility," BVSC analysts said.

According to the Ha Noi Stock Exchange, there were more successful bids last month than in October.

The rate of successful bidding improved substantially, averaging 48 per cent this year compared to 32 per cent in 2010.

Commercial banks became more active in the bond market with the number of banks participating in the market increasing from 25 in 2009 to 36 this year. Meanwhile, market involvement of securities companies decreased, falling from 41 in 2009 to just 30.

The value of auctions on the Ha Noi exchange also expanded, with each bond code rising from VND943 billion (US$45.1 million) in 2010 to almost VND1.97 trillion ($94.3 million) in 2012.

The Vietnamese bond market is currently regarded as one of the most fascinating markets in Asia thanks to its high safety and profitability levels. However, most successful bids are concentrated on short terms of 1-3 years. According to market observers, if this situation continues, it could create high pressure of payment in the short term. — VNS

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