Vietnamese government bonds rose, pushing yields to six-month lows, on speculation demand from local banks increased as the cash supply improved after the Lunar New Year holidays.
The yield on the five-year notes dropped 10 basis points to 6.5 percent, the lowest since Aug. 12, 2015, according to a daily fixing from lenders compiled by Bloomberg. The three-year yield declined nine basis points to 5.72 percent, also the least since Aug. 12. The yield on the five-year securities headed for the biggest weekly drop in a year as financial markets reopened after the week-long holidays, known locally as Tet. The State Treasury sold all 5 trillion dong ($224 million) of the sovereign debt that it offered on Wednesday, the Hanoi Stock Exchange said on its website.
“With the Tet holidays being over, liquidity at banks has improved,” said Alan Pham, the Ho Chi Minh City-based chief economist at VinaCapital Group Ltd., the nation’s biggest fund manager. “So banks put the money to use by buying bonds.”