VIETNAM BOND MARKET ASSOCIATION

VIETNAM BOND MARKET REPORT October 2016  In October 2016, there were 4 government bond auctions in the primary market which helped the State Treasury raise VN19,886 billion out of the VND20,600 billion offered. The offering/winning ratio was 96.5%, higher than the 81.7% rate last month.  In the corporate bond market, both Vietcombank and GELEX planned to issue VND2,000 billion of corporate bond each.  Total outright bond trading volume in October was VND116,030 billion, 16.7% higher than in September. The average daily trading volume this month was VND5,525 billion.  As of the end of October 2016, total outstanding value of Government bond, Governmentguaranteed bond and municipal bond is VND925,130 billion. The market share of Government bonds in total bond outstanding value was 82.04% or VND758,948billion, came next was Government-guaranteed bond with 15.39% or VND142,381 billion and the remaining 2.57% is municipal bond.  Data from the VBMA Market Makers Chatroom indicated that Government bond yield fixing at the end of October decreased markedly across all tenor except 1-year compared to September. Specifically: +6.6 bps with 1-year bond, -25.7 bps in 2-year bond, -28.9 bps in 3year bond, -4.1 bps in 5-year bond, -13.6 bps in 7-year bond and -25.5 bps in 10-year bond.

VIETNAM BOND MARKET REPORT October 2016

PRIMARY MARKET The State Treasury raised VND19,886 billion via bond auctions. The winning/offering surged to 96.5% from 81.7% last month. In October 2016, there were 4 government bond auctions in the primary market which helped the State Treasury raise VN19,886 billion out of the VND20,600 billion offered. The offering/winning ratio was 96.5%, higher than the 81.7% rate last month. Table 1: Government bond auction results in October 2016:

(years)

Offering volume (VND bio)

Winning volume (VND bio)

Winning interest rate (%)

TD1646503

30

1,300

1,179

7.98

26/10/2016

TD1623483

7

1,000

700

5.45

3

19/10/2016

TD1631465

15

1,000

1,000

7.2

4

19/10/2016

TD1626457

10

1,000

1,000

6.14

5

19/10/2016

TD1636502

20

1,300

1,007

7.71

6

12/10/2016

TD1646503

30

5,800

5,800

7.98

7

12/10/2016

TD1623483

7

1,000

1,000

5.45

8

05/10/2016

TD1621488

5

1,000

1,000

4.9

9

05/10/2016

TD1626457

10

1,000

1,000

6.2

10

05/10/2016

TD1646495

30

5,200

5,200

7.98

11

05/10/2016

TD1636502

20

1,000

1,000

7.72

12

24/10/2016

BVBS16410

15

674

100

7.66

13

24/10/2016

BVBS16372

10

500

0

14 15

17/10/2016

BVBS16371

10

500

0

17/10/2016

BVBS16409

15

774

100

7.68

16

10/10/2016

BVBS16370

10

500

200

6.8

17

10/10/2016

BVBS16408

15

500

500

7.68

18

10/10/2016

BVBS16331

5

500

200

5.15

19

03/10/2016

BVBS16369

10

500

50

7.09

20

03/10/2016

BVBS16407

15

500

0

21

28/10/2016

BVDB16109

5

2,000

529

5.4

22

28/10/2016

BVDB16056

3

1,350

700

4.65

23

18/10/2016

BVDB16108

5

3,350

0

No.

Date of bidding

Bond code

1

26/10/2016

2

Tenors

Up/Down compared to the previous auction

Source: HNX, VBMA

Vietnam Bond Market Association

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VIETNAM BOND MARKET REPORT October 2016

Figure 1: Offering and winning volume of Government bond in the last 13 months. 65,000

110.0% 98.4%

55,000

96.6% 84.0%

81.5% 80.2%

45,000

96.5% 90.0%

94.6% 86.7%

82.2%

81.7% 71.9%

70.7%

70.0%

35,000 50.8%

50.0%

25,000 30.0% 15,000 10.0%

5,000 (5,000)

Oct

Nov

Dec

Jan

Feb March April

Winning volume

May

June

Offering volume

July August Sept

Oct

-10.0%

Winning/Offering ratio

Source: HNX, VBMA

Table 2: Bond auctions result in October 2016, classified by tenors. No.

Tenors

Offering amount (VND bio)

Winning amount (VND bio)

Winning/Offering ratio

1 2

5 Years 7 Years

1,000 2,000

1,000 1,700

100.0% 85.0%

3 4 5 6

10 Years 15 Years 20 Years 30 Years Total

2,000 1,000 2,300 12,300

2,000 1,000 2,007 12,179

100.0% 100.0% 87.3%

20,600

19,886

99.0% 96.5%

Source: HNX, VBMA

In the first 10 months of 2016, the State Treasury raised VND270,206 billion from Government bond auction at HNX, accomplishing 96.2% of the second adjusted issuance plan (VND281,000 billion) for this year. Government bond having payment date in November 2016 Table 3: Government bond payment in November 2016 NO.

BOND CODE

TENOR (years)

DATE OF ISSUE

DATE OF MATURITY

TOTAL ISSUING VALUE (VND BIO)

COUPON RATE (%/YEAR)

1

TD1518355

3

19-Nov-2015

19-Nov-2018

7,000

5.9

2

TD1518356

3

26-Nov-2015

26-Nov-2018

7,800

5.8

Vietnam Bond Market Association

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VIETNAM BOND MARKET REPORT October 2016

3

QH091910

10

16-Nov-2009

16-Nov-2019

250

9.9

4

TD1520269

5

05-Nov-2015

05-Nov-2020

7,948

6.5

5

TD1520270

5

10-Nov-2015

10-Nov-2020

4,650

6.6

6

TD1520271

5

12-Nov-2015

12-Nov-2020

7,185

6.6

7

TD1424204

10

15-Nov-2014

15-Nov-2024

200

6.4 Source: VBMA

Corporate Bond Vietcombank planned to issue VND2,000 billion corporate bond According to the State Securities Commission, within 90 days from the 24 th of October 2016, Vietcombank is allowed to issue VND 2,000 billion corporate bond. The bond will be unsecured and inconvertible. GELEX planned to issue VND2,000 billion corporate bond The Board of Directors of the Vietnam Electrical Equipment JSC. Discussed and approved the plan to issue about VND2,000 billion corporate bond with warrant. The bond will be issued in three phases.

Vietnam Bond Market Association

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VIETNAM BOND MARKET REPORT October 2016

SECONDARY MARKET The total trading volume in October was VND116,030 billion Total outright bond trading volume in October was VND116,030 billion, 16.7% higher than in September. The average daily trading volume this month was VND5,525 billion. Table 4: Outright trading volume in October 2016 (VND bio)

Municipal bond Governemnt Bond Gov’ Guaranteed Bond Total

Trading value

Market share

142 102,922 12,966 116,030

0.1% 88.7% 11.2% 100.0%

Source: HNX, VBMA

Figure 2: Trading value in the last 13 months (VND bio) 120,000 100,000 80,000 60,000 40,000 20,000

85,040 82,280 82,643 90,800

74,122 46,008 46,849 43,836

51,621 33,935

116,030 100,288

45,579

0 Oct

Nov

Dec

Jan

Feb

March April

May

June

July August Sept

Oct

Source: HNX, VBMA Table 5: Bonds with largest volume of outright trading in October 2016. No.

Bond Code

Issuance date

Initial tenors (Years)

Trading value (VND billion)

1 2 3 4 5 6

TD1621488 TD1518357 TD1623483 TD1623480 TD1623482 TD1518356

01-Sep-2016

5 3 7 7 7 3

4,557 3,850 3,738 3,099 3,080 3,077 21,402

03-Dec-2015 08-Sep-2016 23-Jun-2016 25-Aug-2016 26-Nov-2015

Total

Source: HNX, VBMA The total trading value of the above 6 bonds alone accounted for 18.4% of all outright Government bond trading in October. Vietnam Bond Market Association

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VIETNAM BOND MARKET REPORT October 2016

Government bonds account for the large majority of total bond outstanding. As of the end of October 2016, total outstanding value of Government bond, Government-guaranteed bond and municipal bond is VND925,130 billion. The market share of Government bonds in total bond outstanding value was 82.04% or VND758,948billion, came next was Government-guaranteed bond with 15.39% or VND142,381 billion and the remaining 2.57% is municipal bond. Figure 3: Outstanding bond value market share at the end of October 2016: 2.57% 15.39%

Government bond Gov'-guaranteed bond 82.04%

Municipal bond

Source: HNX, VBMA

Movements of VBMA’s Government Bond Yield Fixing in October 2016 Data from the VBMA Market Makers Chatroom indicated that Government bond yield fixing at the end of October decreased markedly across all tenor except 1-year compared to September. Specifically: +6.6 bps with 1-year bond, -25.7 bps in 2-year bond, -28.9 bps in 3year bond, -4.1 bps in 5-year bond, -13.6 bps in 7-year bond and -25.5 bps in 10-year bond. Figure 4: VBMA Gov’ Bond Yield Fixing Curve at the end of August, September and October 2016 7.00% 6.50% 6.00% 5.50% August 5.00%

September

4.50%

October

4.00% 3.50% 3.00% 1y

2y

3y

5y

7y

10y

Source: VBMA Vietnam Bond Market Association

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VIETNAM BOND MARKET REPORT October 2016

Figure 5: Movement of VBMA Gov’ Bond yield fixing in the first 10 months of 2016. 7.50% 7.00% 6.50% 6.00%

1y

5.50%

2y

5.00%

3y

4.50%

5y

4.00%

7y 10y

3.50% 3.00%

Source: VBMA

Thank you for reading VBMA’s Monthly Bond Market Report. For more information, please contact: VIETNAM BOND MARKET ASSOCIATION 14th Floor, Tower A Vincom, 19 Ba Trieu Str.,Hai Ba Trung Distr., Ha Noi Tel: (84) 24 3974 8781 Fax: (84) 4 3974 8782 Website: www.vbma.org.vn

Disclaimer: The information and opinions in this report are those of Vietnam Bond Market Association (VBMA) research activity. VBMA does not make any representation or warranty, express or implied, as to the fairness, accuracy, or completeness. While all reasonable care has no representation as to its accuracy or completeness and it should not be relied upon as such. VBMA accepts no liability whatsoever for any loss arising from use of this report or its contents. This report is being supplied solely for informational purposes and may not be reproduced, distributed or published by recipient for any purpose.

Vietnam Bond Market Association

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