Fixed Income September 2022 - Bond yields close at four-year highs

- G-bond issuance plunged to VND10.2tn (USD430mn) with a winning rate of 37.1% in September from VND26.2tn (USD1.1bn) and winning rate of 80.5% in August. By September 30, the Vietnam State Treasury (VST) had issued VND45.7tn (USD1.9bn) — 53.8% of its Q3 plan — and VND114.8tn (USD4.8bn) — 28.7% of its annual plan.

- Yields on primary issuance continued to increase with 10Y and 15Y G-bond yields rising 15 bps MoM to 3.0% and 3.5%, respectively.  

- However, G-bond yields in the secondary market spiked after the State Bank of Vietnam (SBV) raised its policy rates by 1 ppt in reaction to the Fed’s rate hike on September 22. As of end-September, yields of 1Y, 5Y and 10Y bonds in the secondary market quoted at 4.5% (+1.9 ppts), 4.4% (+1.4 ppts) and 4.8% (+1.2 ppts), respectively — the highest levels since January 2019. 

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