We were honored to welcome participation and discussion from Mr. Truong Hung Long – General Director of the Debt Management and External Finance Department, Mr. Nguyen Thanh Long – Chairman of the Hanoi Stock Exchange, Ms. To Thi Nguyet Nga, Deputy Head of Budget Management Department - State Treasury and other representatives from the Department of Debt Management and External Finance, Department of Banking and Financial Institutions and other related agencies.  

As part of the opening ceremony, Mr. Truong Hung Long – General Director of the Debt Management and External Finance Department remarked that the event would be a good opportunity for related staff to obtain the most updated information on public debt and Government bond market, which would facilitate internal management and operations within both departments.  

Commencing the seminar, Mrs. Nguyen Thi Thu Hien – Deputy Head of the Planning and Risk Management Division – Department of Debt Management and External Finance had a presentation on public debt overview, debt management practice for the period of 2011-2017 and goals and direction for the coming years. As stated by Mrs. Hien, there has been a sharp increase in public debt stock since 2011, averaging at an annual rate of 18.4%. As of the end of 2017, public debt outstanding is estimated at 3,128 trillion dong, or 62.6% GDP; Government debt is at 2,590 trillion dong, or 51.8% GDP. Domestic debt over total debt stock ratio has been improved, from 40% in 2011 to 60.3% in 2017, which contributes to ensuring national financial safety (a majority of domestic debt comes from Government bond issuance).  

To continue the discussion, Mrs. Nguyen Thi Ngoc Hieu, Head of Financing Division – Budget Management Department - State Treasury, Mr. Tran Anh Tuan – Director of the Bond Market Department and Mr. Pham Van Hieu – Department of Banking and Financial Institutions respectively presented on issues related to the Government bond issuance practice, the current development state of the Government bond market in 2017 and the direction and measures for deepening the market for the 2018-2020 period.  

As presented, Government bond outstanding debt as of 31/12/2017 was 1,327,167.5 billion dong and 2.7 billion US dollars, approximately 27.4% GDP, which reflected an 11.5% increase comparing to 2016.

Issuance volume of Government bond 2011-2017

                                                                                                Unit: billion dong

Debt outstanding to GDP

Source: Department of Banking and Financial Institutions

• Average Government bond issuance tenor rose from 8.71 years in 2016 to 12.52 years in 2017. Average time to maturity as of end-2017 was 6.63 years, increasing by 0.65 years from 2016.
• Issuance interest rates were reduced in all tenors, ranging from 0.62% to 1.89% decreases. Average interest rate of 2017 issuance was 6.07%, reduced by 0.42% comparing to 2016. Average interest rate of the overall profile was 6.89% as of end-2017, a slight decrease from 7.13% of 2016.

  In terms of secondary transactions:

• Average transaction volume reached 9,214 billion dong/session, increasing by 46,6% since 2015 (average  6,285 billion dong/session)
• Average outright transaction volume reached 4,672 billion dong/session and the figure was 4,542 billion dong/session for repo transactions.  

  Investor base:

• By type of investor: Commercial banks hold 52.4%, Social Insurance hold 36.3%, Insurance companies hold 6.7%, Deposit Insurance hold 2,8% and the rest is held by other investors.

By geography: foreign investors hold 5% and domestic investors hold 95% of total Government bond stock.

In 2018, the primary bond market will continue to see close cooperation between fiscal and monetary policies, as well as tight communication regarding issuance plans, stages, tenor and interest rate in order to maintain the linkage between bond issuance practice and monetary policy management. The focus will also be on monitoring the market and maintaining mutual communication, consulting and policy discussion amongst market participants in order to grasp investment needs and facilitate meaningful dialogues; set requirements for market participants on following 2018’s issuance targets. Market regulation measures include improving international collaboration and information sharing regarding developing Government bond market with other countries, as well as promoting further cooperation with strategic partners: World Bank, Asian Development Bank, UK Embassy, GIZ...

Regardless of the time restriction, the seminar was filled with meaningful discussions and exchanges of useful information, and in overall, a highly successful event.