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VIETNAM’S BOND
VIETNAM SELLS FIRST DOLLAR BOND
IN 5 YEARS
Vietnam sold dollar bonds abroad for the first time in almost five years in
7 November 2014.
The interest thing is that the demand of Vietnam’s bond was over, which showed in 10
billions of buying order while there was just 1 billions of bond to sell.
Question: what make international investor interested in government’s bond ?
1. HIGH INTEREST
Government
Interest (%)
US
2.37
Hong Kong
1.82
England
2.19
Brazil
4.23
Vietnam’s bond interest rate was 4.8%
Mexico
which lower than the expectation of Government (5.2%).
Canada
However, it’s more competitive than other country’s bond. Germany
3.34
2.06
0.81
France
1.17
Italy
2.35
Japan
0.51
Australia
3.34
Singapore
2.29
Bloomberg.com
2. CREDIT RATING
It is rated by 3 credit rating agency, which are Standard & Poor’s (S&P), Moody's
Investor's Service and Fitch Ratings.
They are the 3 agency who ranks the creditworthiness of borrowers using a
standardized ratings scale which measures expected investor loss in the event of
default.
In November 2014, Moody’s raised Vietnam rate B2 to B1 and Fitch also increased
the rate of Vietnam from B+ to BB. Thus international investors were more confident in
buying the bond.
3. DECENTRALIZE INVESTMENTS
With the majority of investors who was looking for Vietnam’s bond were investment
funds. The main purpose besides looking for attractive profit that investors pay
attention to bond auctions of Vietnam is looking for work attractive financial
instruments to diversify their portfolios.
Rajeev De Mello, who manages $10 billion as head of Asian fixed-income at
Schroder Investment Management Ltd. in Singapore , said by phone. “The search for
yield is still there. We haven’t seen Vietnam for a while in the market. The macro situation
in Vietnam has stabilized. All those factors will be good for this issue.”