Demand for government bonds to fall(21/5)
21/05/2013 - 12 Lượt xem
“We suppose that demand for investment in government bonds will fall gradually as credit activities have been improved and interest rates might be lowered further in the near future. Besides, in the current context, coupons of government bonds are no longer so attractive that commercial banks and credit institutions should pour money into the channel,” according to a report of BVSC.
“As of now, investors have considerably ventured in government bonds, so we believe that the preliminary market will continue to move flat and show no considerable changes in the near future,” says the report.
Similarly, credit institutions also predict the moves in the bond market will change if lending activities show improvement in the coming time. The latest data announced by the State Bank of Vietnam shows that credit growth is put at 2.11% as of the end of April.
Liquidity of the banking industry has still remained abundant, while credit demand has yet to rise strongly and capital mobilization is still seen as positive. The low base rate in the inter-bank market has created an attractive gap for bond investors.
In the meantime, the foreign exchange market stays stable while the consumer price index posts low growth and shows no signs of a strong rise in the months to come. These elements have prompted local banks to predict government bond rates to tumble by an additional 5-10 basis points this week.
Source: SaigonTimes.
