G-bonds issuance declined for the third consecutive month

- In October, the VST issued VND14.5tn (USD590.8mn; -25.3% MoM) of G-bonds – the lowest monthly figure since September 2022. The low issuance volume in October could be attributed to easing issuance pressure as public investment slowed in October (there was a fiscal surplus of VND41.1tn (USD1.7bn) in 10M 2023) and low demand.

- As of the end of October, the VST had completed only 11.1% of Q4 issuance plan. In 10M 2023, the VST issued VND264.4tn (USD10.8bn) of G-bonds, fulfilling 66.1% of its annual plan. Meanwhile, VND59.2tn (USD2.4bn) of G-bonds expired in 10M 2023, leading to a net issuance of VND205.2tn (USD8.4bn) – 2.0x the net issuance recorded in 10M 2022 (VND101.6tn/USD4.1bn).

- In the last auctions in October, yields of 10Y and 15Y G-bonds inched up to 2.42% (+6 bps MoM) and 2.65% (+6 bps MoM), respectively. Meanwhile, G-bond yields in the secondary market increased across all tenors, due to several factors including: (1) strong increases in US Treasury yields (10Y yields jumped 30-40 bps to 4.9% - 5.0% in October, from 4.6% at end-September); and (2) rising interbank interest rates caused by SBV’s liquidity withdrawal to ease depreciation pressure of the VND. 

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