FREE

VIETNAM BOND MARKET REPORT JUL 2025: CORRECTION AND SELECTIVE PHASE

Primary government bond issuance slowed, reaching only VND 25.86 trillion (‑15.1% MoM). In response to weaker than expected Q2 results, the State Treasury raised its auction target to VND 52 trillion to accelerate funding. The winning rate dropped sharply to 49.9%, despite a bid-to-offer ratio of 84.9%, reflecting the standoff between rising yield expectations and the State Treasury’s objective to control funding costs.
The 10-year tenor remained dominant (83.7% of total issuance), while longer tenors (>15 years) saw weak demand, indicating investor preference for liquidity. Government bond yields continued to climb, with the 10-year winning yield rising to 3.29% p.a. at end-July—up 11bps MoM and 53bps YoY. The yield curve shifted higher across all tenors.
Secondary market liquidity moderated, with average daily trading value down 17.2%, mainly due to reduced trading in the 15-year tenor. Foreign investors remained net buyers, lending support to market stability.
The corporate bond market cooled significantly, with new issuance in July at just VND 27.55 trillion (‑78% MoM), though YTD volume was still up 51% YoY thanks to a surge in June. The banking sector remained dominant, accounting for 81.5% of total issuance.
Cautious corporate sentiment stemmed from higher funding costs and the amended Enterprise Law (effective 1 July 2025), which tightened private placement requirements for unlisted firms (limiting total liabilities to five times equity).
Early redemptions fell 68% MoM, mainly among bank-issued bonds from the high-rate period (2020–2023). Secondary corporate bond liquidity weakened notably (‑32.3% MoM), with trading concentrated in long-term real estate and bank bonds. Investor sentiment turned more cautious amid substantial refinancing pressure and heightened default risks.
Refinancing pressure in the corporate bond market is set to intensify in August (VND 36 trillion, including VND 21 trillion in real estate). Fifteen issuers announced delayed principal/interest payments in July, including prominent names such as Hoang Anh Gia Lai, Bong Sen, Saigon Glory, and Hano-Vid, who continued to extend bond maturities.