Illustrative image (Source: laodong.com.vn) Hanoi (VNA) - When a new circular comes into effect September 1,market members will be able to borrow Government bonds (G-bond) for sale.
Thecircular was issued by the finance ministry early this month to amend andsupplement some articles of an older circular regulating the trading ofG-bonds, Government-backed bonds and local-authority bonds.
G-bondborrowing must be negotiated by relevant sides, and the transfer must beconducted on the Hanoi Stock Exchange (HNX) and/or the Vietnam SecuritiesDepository (VSD).
Only market members eligible to participate inG-bond auctions on HNX regulations can borrow G-bond for sale.
The loanterm must not exceed 180 days and the maturity date of the G-bond. The loanmust be paid back in the type of G-bond notes that were borrowed before.
If thepayer does not have a sufficient amount of G-bond notes, the payment mustinclude an addition of other equivalent convertible G-bond notes, which aretraded on the HNX. The transfer of equivalent convertible G-bond notes must be agreedon by all sides in the deal.
Relevantparties negotiate with each other and are accountable for issues regarding thevolume of G-bond notes, guaranteed assets and loan interest rates.
Thelending of G-bond notes must be legal in accordance with current regulations.The finance ministry also asked the HNX and VSD to issue detailed instructionsfor G-bond lending.
Marketmembers on the Hanoi Stock Exchange will be divided into two types: ordinarytrader and special trader.
Ordinarytraders are securities companies that are allowed as market members by the HNX.They can perform brokerage and proprietary trading activities at the stockexchange.
Specialtraders are commercial banks and commercial bank branches that are allowed toserve as member markets by the HNX. They can only perform proprietary tradingactivities at the stock exchange.
The StateTreasury of Vietnam, in particular, is not required to follow theadministrative rules as a market member in the new circular.
The statetreasury can perform “buy” orders in G-bond buy-sell back transactions on thebond trading market at the HNX. The due term for each trading transaction isless than three months.
According to the HNX, non-bank investors haveparticipated more in the bond market. 40 percent of market members in theprimary bond market are non-bank financial institutions, holding 20 percent ofthe outstanding bond notes, while the number of banks participating in the bondmarket has fallen to 60 percent from 80 percent. The rise of non-bank investorshas helped increase the capital raised from market members.
The state treasury is targeting bond sales of 250 trillion VND (11.1 billionUSD) this year, lower than last year’s level due to unpredictable changes onthe global financial market.
G-bondswill be divided into different categories, with maturity of up to 30 years. Ofthe total bond volume issued this year, 20 percent will be one to three-yearbonds, 60 percent will be five to 10-year bonds, and the rest will be bondswith a maturity of more than 15 years.-VNA
Thecircular was issued by the finance ministry early this month to amend andsupplement some articles of an older circular regulating the trading ofG-bonds, Government-backed bonds and local-authority bonds.
G-bondborrowing must be negotiated by relevant sides, and the transfer must beconducted on the Hanoi Stock Exchange (HNX) and/or the Vietnam SecuritiesDepository (VSD).
Only market members eligible to participate inG-bond auctions on HNX regulations can borrow G-bond for sale.
The loanterm must not exceed 180 days and the maturity date of the G-bond. The loanmust be paid back in the type of G-bond notes that were borrowed before.
If thepayer does not have a sufficient amount of G-bond notes, the payment mustinclude an addition of other equivalent convertible G-bond notes, which aretraded on the HNX. The transfer of equivalent convertible G-bond notes must be agreedon by all sides in the deal.
Relevantparties negotiate with each other and are accountable for issues regarding thevolume of G-bond notes, guaranteed assets and loan interest rates.
Thelending of G-bond notes must be legal in accordance with current regulations.The finance ministry also asked the HNX and VSD to issue detailed instructionsfor G-bond lending.
Marketmembers on the Hanoi Stock Exchange will be divided into two types: ordinarytrader and special trader.
Ordinarytraders are securities companies that are allowed as market members by the HNX.They can perform brokerage and proprietary trading activities at the stockexchange.
Specialtraders are commercial banks and commercial bank branches that are allowed toserve as member markets by the HNX. They can only perform proprietary tradingactivities at the stock exchange.
The StateTreasury of Vietnam, in particular, is not required to follow theadministrative rules as a market member in the new circular.
The statetreasury can perform “buy” orders in G-bond buy-sell back transactions on thebond trading market at the HNX. The due term for each trading transaction isless than three months.
According to the HNX, non-bank investors haveparticipated more in the bond market. 40 percent of market members in theprimary bond market are non-bank financial institutions, holding 20 percent ofthe outstanding bond notes, while the number of banks participating in the bondmarket has fallen to 60 percent from 80 percent. The rise of non-bank investorshas helped increase the capital raised from market members.
The state treasury is targeting bond sales of 250 trillion VND (11.1 billionUSD) this year, lower than last year’s level due to unpredictable changes onthe global financial market.
G-bondswill be divided into different categories, with maturity of up to 30 years. Ofthe total bond volume issued this year, 20 percent will be one to three-yearbonds, 60 percent will be five to 10-year bonds, and the rest will be bondswith a maturity of more than 15 years.-VNA
VNA
