Government bond yields edge higher amid cautious investor sentiment

HÀ NỘI — The government bond market saw short-term yields edge higher again in the week of May 4-8 as primary auction demand weakened and investors continued to seek higher returns amid cautious market sentiment.The market data compiled by Yuanta Securities Việt Nam showed that auction activity on the primary government bond market turned less positive compared with the previous holiday-shortened week.During the period, the State Treasury offered a total of VNĐ18.5 trillion (US$701.3 million) worth of government bonds but total registered bids reached only VNĐ7.1 trillion, equivalent to a bid-to-cover ratio of approximately 38.35 per cent.As a result, only VNĐ5.5 trillion worth of bonds were successfully issued, corresponding to a winning ratio of 29.73 per cent.The 10-year tenor continued to account for the largest share of issuance, with VNĐ14 trillion offered. However, only VNĐ3.5 trillion was successfully mobilised, with the issuance yield rising by one basis point from the previous week to 4.17 per cent per year.Meanwhile, the five-year tenor recorded successful issuance of VNĐ2 trillion out of VNĐ3 trillion offered, with the yield climbing three basis points to 3.89 per cent annually.No successful issuance was recorded for 15-year and 30-year bonds during the week.Cumulatively since the beginning of 2026, the State Treasury has raised over VNĐ131 trillion through government bond issuance, equivalent to about 26.21 per cent of its full-year funding plan.The Treasury is expected to continue offering VNĐ16.5 trillion worth of government bonds in the coming auction cycle, with the 10-year tenor again accounting for the largest portion at VNĐ12 trillion, followed by VNĐ3 trillion in five-year bonds, VNĐ1 trillion in 15-year bonds and VNĐ500 billion in 30-year bonds.On the secondary market, trading liquidity recovered after the holiday period but remained below the levels seen in several active weeks during April.Total trading value reached around VNĐ75.6 trillion, including VNĐ55.6 trillion in outright transactions and VNĐ20 trillion in repo transactions.Although liquidity improved sharply compared with the previous week due to a full trading schedule, turnover remained below the VNĐ90-100 trillion range commonly recorded during some weeks in April.Government bond yields on the secondary market showed a slight upward trend, particularly in shorter tenors.The one-year yield increased by one basis point to 3.51 per cent per year, while the two-year yield rose by two basis points to 3.46 per cent. The three-year tenor posted the strongest increase, rising six basis points to 3.66 per cent annually.According to Yuanta Việt Nam, the most notable movement occurred in the three-year tenor, where yields rebounded compared with late April levels, while the benchmark 10-year yield remained anchored within the 4.35-4.37 per cent range.Foreign investors also returned to net selling on the government bond market after strong net buying during the previous holiday week.Net foreign selling totalled VNĐ289.5 billion during the period.Yuanta Việt Namsaid government bond yields are likely to remain stable or increase slightly in the near term, particularly for five-year to 10-year maturities, as primary auction results indicate investors are still demanding higher yields.However, the firm noted that stable interbank interest rates and exchange rates could help limit the risk of a sharp increase in government bond yields. — BIZHUB/VNS