Vietnam bond yields surge to 12-month high on inflation concern

Vietnam’s five-year bonds dropped, pushing yields to more than a 12-month high, on concern inflation accelerated in April. The dong gained.

Consumer prices increased 13.9 percent in March from a year earlier, the most since February 2009, official figures show. The General Statistics Office is due to report the April numbers next week.

The yield on the government’s benchmark five-year bond rose 11 basis points to 12.23 percent, the highest level since April 26, 2010, according to a daily fixing price from banks compiled by Bloomberg.

“Demand is very weak because investors are expecting yields will reach 13 percent to 14 percent,” said Tran Thi Ngoc Thanh, deputy manager of the investment banking division at Sacombank Securities Joint-Stock Co. “There are forecasts in the market that consumer prices will rise as much as 1.8 percent this month.”

The dong gained 0.03 percent to 20,923 per dollar as of 2:58 p.m. in Hanoi, Bloomberg data show.

The State Bank of Vietnam fixed the reference rate at 20,733, compared with 20,728 yesterday, its website showed. The currency is allowed to trade up to 1 percent on either side of that rate. – Bloomberg

Tags: Vietnam bonds