Participants listen to Phan Thi Thu Hien, director of the Department of Banking and Financial Institutions under the Ministry of Finance, review the ten-year operation of Vietnam's G-bond market. (Photo: VNA)Hanoi (VNA) - Vietnam’s Government bond (G-bond) market wouldbecome a safe, effective and highly lucrative investment mechanism forcommercial banks, insurance networks, investment funds and foreign investors.
The statement was made by Phan Thi Thu Hien, Director of the Department ofBanking and Financial Institutions under the Ministry of Finance, during aconference to review the ten-year operation and development of the G-bondmarket in Hanoi on December 10.
The goal for the next five years is to meet the demand to raise capital forsocio-economic development as official development assistance (ODA) andpreferential loans decrease, Hien said.
To achieve this goal, Hien said the Government needed to connect capitalmobilisation through G-bonds with the administration of the State budget andfund management.
At the same time, she said market organisation and trading would be improved,shortening the process from issuance to registration, deposit, listing, tradingand payment in accordance with the development of Industry 4.0 to increaseliquidity in the secondary market.
The G-bond market has become an effective capital mobilisation channel fordevelopment investment.
The size of the market at the end of last month was equal to 25.1 percent ofGDP in 2019, 12 times higher than in 2009. The average trading volume in thefirst 11 months of this year reached 9 trillion VND (387.26 million USD) persession, increasing 24 times compared to 2009.
Vietnam’s G-bond market has grown at an average rate of 27 percent per yearover the past decade, the highest growth rate in emerging economies in EastAsia, Hien said.
In addition, the G-bond market has also become an important medium andlong-term capital mobilisation channel for the State budget. The focus onissuing long-term G-bonds has enabled the Government to increase borrowing inthe domestic market and reduce foreign loans.
From 2009-19, the G-bond issuance channel mobilised 1.96 quadrillion VND forthe State budget, an average of about 175 trillion VND per year.
Alwaleed Alatabani, the Lead Financial Sector Specialist at the World Bank in Vietnam,said that in recent years, the G-bond market had achieved remarkable results.The WB highly appreciated the close cooperation of Vietnamese State agencies inthe development of the G-bond market in Vietnam.
He recommended that, as the market was growing, it was necessary to expand thenetwork of investors holding G-bonds in order to gradually reduce thedependence on investors from the banking sector.
There was a need for a broader and more diverse legal framework to encourage non-bankinginvestors, including those from insurance, investment funds and foreigninvestors, to participate in the G-bond market, Alatabani said./.
The statement was made by Phan Thi Thu Hien, Director of the Department ofBanking and Financial Institutions under the Ministry of Finance, during aconference to review the ten-year operation and development of the G-bondmarket in Hanoi on December 10.
The goal for the next five years is to meet the demand to raise capital forsocio-economic development as official development assistance (ODA) andpreferential loans decrease, Hien said.
To achieve this goal, Hien said the Government needed to connect capitalmobilisation through G-bonds with the administration of the State budget andfund management.
At the same time, she said market organisation and trading would be improved,shortening the process from issuance to registration, deposit, listing, tradingand payment in accordance with the development of Industry 4.0 to increaseliquidity in the secondary market.
The G-bond market has become an effective capital mobilisation channel fordevelopment investment.
The size of the market at the end of last month was equal to 25.1 percent ofGDP in 2019, 12 times higher than in 2009. The average trading volume in thefirst 11 months of this year reached 9 trillion VND (387.26 million USD) persession, increasing 24 times compared to 2009.
Vietnam’s G-bond market has grown at an average rate of 27 percent per yearover the past decade, the highest growth rate in emerging economies in EastAsia, Hien said.
In addition, the G-bond market has also become an important medium andlong-term capital mobilisation channel for the State budget. The focus onissuing long-term G-bonds has enabled the Government to increase borrowing inthe domestic market and reduce foreign loans.
From 2009-19, the G-bond issuance channel mobilised 1.96 quadrillion VND forthe State budget, an average of about 175 trillion VND per year.
Alwaleed Alatabani, the Lead Financial Sector Specialist at the World Bank in Vietnam,said that in recent years, the G-bond market had achieved remarkable results.The WB highly appreciated the close cooperation of Vietnamese State agencies inthe development of the G-bond market in Vietnam.
He recommended that, as the market was growing, it was necessary to expand thenetwork of investors holding G-bonds in order to gradually reduce thedependence on investors from the banking sector.
There was a need for a broader and more diverse legal framework to encourage non-bankinginvestors, including those from insurance, investment funds and foreigninvestors, to participate in the G-bond market, Alatabani said./.
VNA
