VND300 billion raised in first government bond redemption session

The Hanoi Stock Exchange (HNX) announced that the first auction to buy back government bonds issued by the Vietnam State Treasury (VST) has been successfully held by HNX, with the winning bid reaching VND300 billion from two members.

VND300 billion has been raised in the first government bond redemption session held by the Hanoi Stock Exchange and the Vietnam State Treasury. (Photo for illustration)
VND300 billion has been raised in the first government bond redemption session held by the Hanoi Stock Exchange and the Vietnam State Treasury. (Photo for illustration)

The HNX and VST jointly held the bidding session, which was conducted on the Government asset-backed securities system (ABBS) built and developed by HNX.

At the session, the State Treasury called for a bid of VND 800 billion of Government bonds with a redemption term of 14 days.

There were five members participating in the bid, with the total volume of bidding having reached VND1.15 trillion. As a result, the winning bid reached VND300 billion from two winning members.

The successful bidding session demonstrated the close and effective coordination between HNX and VST in implementing Circular No. 107/2020/TT-BTC of the Ministry of Finance, guiding the repurchase of Government bonds from temporarily idle State funds under the management of the State Treasury.

The above circular has opened up a mechanism to allow the State Treasury to become an investor in the debt instrument market and buy back Government bonds on the secondary market issued by this organisation.

Accordingly, the State Treasury is entitled to carry out the repurchase transactions of Government bonds with commercial banks that are members of Government bond trading and selected by the State Treasury.

Government bonds that are accepted for redemption by the State Treasury are bonds currently listed on the Stock Exchange, with a remaining term of not exceeding one year, under the legal ownership of the seller and are allowed to be transferred.

The ABBS system allows to perform the entire process of bid opening, bid offering, bid evaluation, and transaction price calculation, then the results of repurchase of government bonds will be aggregated with the existing repos transaction to send to the Vietnam Securities Depository (VSD) for clearing.

Government bond repurchase by the State Treasury is expected to bring a fresh breeze to the Government bond market with the participation of investors, especially the State Treasury, contributing to perfecting the market for Government bonds with new transactions, increasing competition in the market, promoting government bond transactions on the secondary market and supporting liquidity for market members.