Report from 18/10 –31/10/2012
Trần Thị Thanh Thảo
Research Analyst
T: +84 4 44568668
Thao.TranThiThanh@mbs.com.vn
MONEY MARKET
INTEREST RATES
The interbank market was stable in the last two weeks. Interbank interest rates declined by 1.5
percentage point in most tenors. The rates stood at 2.5-3% for the ON, 2.5-3% for the one week
and 5-5.5% for the one month.
Banking system’s liquidity remained steady due to abundant supply of capital. Credit growth is
rising slowly comparing to mobilization, and therefore it is expected that liquidity tension in Q4 2012
would be less serious than it was last year. However, the interbank interest rates can be unstable
and even exceed mobilization interest rates in coming months.
In market I, several small banks continued to exceed the cap rates for mobilization because they
could not access to interbank’s fund. Interest rates were raised to 10-11% for short term and 13%
for long term deposits. We believe that the mobilization interest rates probably increase in order to
ensure liquidity for banking system in the end of this year.
Credit growth rate reached 2.77% comparing to the beginning of 2012, showing a slow movement
of capital from the banking system to the economy. We believe that only by resolving sour debts
can credit be accessible for firms.
Abbreviations
Chart 1: Interbank interest rates in VND (%)
CDS: Credit Default Swap
HNX: Hanoi Stock Exchange
MoF: Ministry of Finance
NDF: Non-deliverable forward
OMO: Open Market Operations
ON: Overnight
SBV: State Bank of Vietnam
ST: State Treasury
MBS: MB Securities
USD: United States dollar
VCB: Vietcombank
VDB: Vietnam Development Bank
VGB: Vietnam Government Bond
VNBSP: Vietnam bank for Social
Policies
VND: Vietnam Dong
Source: MB
VND/USD EXCHANGE RATE
The VND/USD rates remained constant in the last two weeks due to the decreasing gap between
domestic and international gold price. At the time of writing, domestic gold price had declined to
46.2 million VND/tael. In the last two weeks, the SBV continued to buy in USD, totaling $10 billion
since January. Until late September, Vietnam’s foreign reserves equated to 11 weeks of imports,
which is a strong support for SBV to intervene when VND/USD fluctuates strongly. The official and
unofficial VND/USD rates varied at about 20,850, decreasing by VND10 since early October.
1
MBS Vietnam: 98 Nguy Nhu Kon Tum,
Thanh Xuan, Hanoi, Vietnam
Website: www.mbs.com.vn
Bloomberg: MBSV<GO>
Sales & Client Trading
Tran Thi Hue Phuong
E: Phuong.TranThiHue@mbs.com.vn
Chart 2: VND/USD exchange rate
Source: MB, MBS
OPEN MARKET OPERATION
The one-digit target for this year’s inflation became more attainable while October’s CPI decelerated
to 0.85% MoM. As a result, less money was net withdrew via OMO in the last two weeks. At this
time, VND2.5 trillion was net withdrawn via OMO. At the same time, VND10.1 trillion of short-term
treasury bills was issued to draw money out of the system. Besides, VND7.3 trillion of treasury bills
matured in the last two weeks. Thus, the SBV has net withdrawn total of 5.6 trillion via OMO and
treasury bills.
Chart 3: OMO net injection (trillion VND)
Source: MB & Bloomberg
BOND MARKET
The bond market was active in the last two weeks. With high banking liquidity, winning rate of the
VGBs’ auctions increased by 57% comparing to the same figure in early October. Winning interest
rates varied around 9.7-10%. In additions, auctions of Government guaranteed bonds became
more active because investors reduced their bidding bond rates, resulting in winning volume of
VND550 billion. Thus, VND 5.2 trillion VND of VGBs and Government guaranteed bonds were
successfully issued in the last two weeks. We believe that bond yields would slightly increase in
coming time due to high pressure on issuing bonds in Q4.
2
MBS Vietnam: 98 Nguy Nhu Kon Tum,
Thanh Xuan, Hanoi, Vietnam
Website: www.mbs.com.vn
Bloomberg: MBSV<GO>
Sales & Client Trading
Tran Thi Hue Phuong
E: Phuong.TranThiHue@mbs.com.vn
Chart 4: Reference VGBs’ yields (%)
Source: Bloomberg
Chart 5: Monthly issued VGBs (VND1,000 bn)
Source: MBS, Bloomberg
Domestic bond market
Date
Issuer
Tenor
Winning
Registered
Offered
amount
amount
amount
(VND bn)
(VND bn)
(VND bn)
Winning IR
29/10
KBNN
2
2000
5330
2000
9.7
29/10
KBNN
3
940
4670
1000
9.85
19/10
KBNN
3
710
2910
1000
10
19/10
KBNN
2
1000
3690
1000
9.8
24/10
NHCSXH
2
300
450
500
0
31/10
NHCSXH
2
100
300
500
10.8
31/10
NHCSXH
3
150
350
500
10.9
31/10
NHCSXH
5
0
50
500
0
24/10
NHCSXH
3
0
100
500
0
24/10
NHCSXH
5
0
50
500
0
17/10
NHCSXH
2
0
200
500
0
17/10
NHCSXH
3
0
200
500
0
17/10
NHCSXH
5
0
0
500
0
Ceiling
rate
Source: HNX
Table 1: Recent VGBs aunction on HNX
3
MBS Vietnam: 98 Nguy Nhu Kon Tum,
Thanh Xuan, Hanoi, Vietnam
Website: www.mbs.com.vn
Bloomberg: MBSV<GO>
Sales & Client Trading
Tran Thi Hue Phuong
E: Phuong.TranThiHue@mbs.com.vn
Table 2: Outright transactions on HNX
Date
Code
Remaining
Tenor
volume
Price
(VND)
5
Coupon
(%)
12,15
31/10
TD1217002
30/10
TD1217037
30/10
29/10
29/10
Yield
(%)
Value
(VND bn)
600
108.232
9,65
70
5
9,40
4.000.000
97.092
10,20
406
VDB110016
8
11,50
4.000.000
107.519
10,00
453
TD1217002
5
12,15
600
107.711
9,80
70
TD1015064
3
10,29
1.000.000
101.196
9,80
101
26/10
CP061318
1
8,55
2.000.000
99.654
8,93
200
26/10
TB1015055
3
10,30
4.000.000
100.305
10,12
414
26/10
TD1215001
3
12,10
2.000.000
104.494
9,70
228
26/10
TB1013060
1
9,78
2.000.000
100.604
9,03
203
26/10
TD1217038
5
9,50
1.000.000
89.46
12,60
93
25/10
TD1214130
2
9,40
1.000.000
99.609
9,60
102
25/10
VDB111001
1
11,20
4.000.000
100.757
7,71
436
25/10
TD1217002
5
12,15
1.000.000
107.373
9,90
1177
25/10
TD1215035
3
9,40
1.000.000
98.888
9,85
102
24/10
TD1215035
3
9,40
777.776
91.987
13,08
74
24/10
TD1217038
5
9,50
1.540.000
91.564
11,94
146
24/10
CPB0813005
1
8,50
2.600.000
100.279
7,00
278
24/10
TB1013060
1
9,78
2.000.000
100.531
9,13
202
24/10
TD1217037
5
9,40
4.000.000
97.565
10,06
407
23/10
TD1214030
2
8,80
800
98.672
9,65
81
23/10
TD1217036
5
10.80
400
102.649
10,00
43
23/10
VDB110029
8
11,60
1.000.000
99.846
11,60
105
22/10
TD1214030
2
8,80
200
99.18
9,30
20
22/10
CPB0813005
1
8,50
2.000.000
100.286
7,00
213
22/10
TD1215032
3
10,80
2.000.000
101.66
9,95
214
19/10
TD1215001
3
12,10
1.800.000
104.523
9,70
205
19/10
TD1217036
5
10,80
400
102.688
9,99
43
18/10
TD1214030
2
8,80
200
98.663
9,65
20
18/10
TD1114049
2
12,34
200
103.838
9,80
21
Source: HNX
4
MBS Vietnam: 98 Nguy Nhu Kon Tum,
Thanh Xuan, Hanoi, Vietnam
Website: www.mbs.com.vn
Bloomberg: MBSV<GO>
Sales & Client Trading
Tran Thi Hue Phuong
E: Phuong.TranThiHue@mbs.com.vn
Regional bond market
Table 3: Local government bond yields as of October 2012
1N
USA
2N
3N
5N
7N
10N
0.2814
0.3805
0.7213
1.1405
1.6901
1.34
Singapore
0.38
1.34
Vietnam
9.133
10.433
9.9
10.13
10.367
10.433
Indonesia
4.871
5.712
5.319
5.44
5.53
5.712
2.974
3.467
3.039
3.238
3.407
3.467
1.1462
5.1073
4.0238
4.7288
4.7173
5.1073
Japan
0.098
0.775
0.107
0.199
0.394
0.775
China
2.9
3.58
3.04
3.22
3.47
3.58
Thailand
2.8
3.299
2.895
3.047
3.179
3.299
0.175
0.694
0.231
0.323
0.456
0.694
Malaysia
Philippines
Hong Kong
Source: Bloomberg
C
Chart 6: Vietnam 5 years CDS
Source: Bloomberg
Chart 7: Yields of international government bonds issued in 2005 (%)
Source: Bloomberg
5
MBS Vietnam: 98 Nguy Nhu Kon Tum,
Thanh Xuan, Hanoi, Vietnam
Website: www.mbs.com.vn
Bloomberg: MBSV<GO>
Sales & Client Trading
Tran Thi Hue Phuong
E: Phuong.TranThiHue@mbs.com.vn
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6
MBS Vietnam: 98 Nguy Nhu Kon Tum,
Thanh Xuan, Hanoi, Vietnam
Website: www.mbs.com.vn
Bloomberg: MBSV<GO>
Sales & Client Trading
Tran Thi Hue Phuong
E: Phuong.TranThiHue@mbs.com.vn
7
MBS Vietnam: 98 Nguy Nhu Kon Tum,
Thanh Xuan, Hanoi, Vietnam
Website: www.mbs.com.vn
Bloomberg: MBSV<GO>
Sales & Client Trading
Tran Thi Hue Phuong
E: Phuong.TranThiHue@mbs.com.vn