Year-to-date, the State Treasury has mobilized over 246,7 trillion VND in government bonds, according to VnExpress statistics. In the first week of September alone, issuance value reached approximately 18 trillion VND, about seven times the previous week's figure.

This week's issuance plan has increased to 26 trillion VND, primarily for 5-year and 10-year maturities. This surge in tender size, compared to previous weeks, suggests the State Treasury is accelerating its issuance pace, as it has only met half of its 500 trillion VND annual mobilization target, according to analysts from Yuanta Vietnam Securities Company (YSVN).

Government bonds are debt securities issued by the Ministry of Finance to raise capital for the state budget or specific state-funded programs and projects. Standard maturities include 3, 5, 7, 10, 15, 20, 30, and 50 years.

While government bond yields in many developed countries have reached multi-decade highs due to sell-off pressures, observers note that Vietnam's market remains more moderate.

Vietnamese government bonds are largely insulated from global sell-off shocks. This is primarily due to foreign ownership currently standing at only about 0,15% and very limited integration into global emerging market bond indices like JPMorgan GBI-EM Global Diversified and Bloomberg EM Local Currency Government Index. Additionally, procedural, tax, and indirect capital account regulations create barriers, preventing foreign capital from flowing in and out as rapidly as in more open markets.

According to the Vietnam Bond Market Association (VBMA), the yield spread between Vietnamese and US government bonds was negative across all maturities in August. Data from the end of 15/9 showed 5-year bond yields around 4,13% and 10-year yields at 4,33%, compared to 4,83% and 5% in the US, respectively.

Nevertheless, many analytical groups forecast that Vietnamese government bond yields are likely to tick up in the final months of the year. This is due to significant issuance pressure on the State Treasury to meet its mobilization plan. The high international yield environment, shaped by tightening moves from the European Central Bank (ECB) and the potential for the US Federal Reserve (Fed) to raise interest rates for the first time since 2023, will also indirectly influence domestic yield levels.

"The pressure for yield increases primarily comes from short-term maturities, while long-term maturities remain relatively stable," the VBMA stated in its newly released report.

Phuong Dong