Vietnam’s dollar
bonds are leading gains in Asia this year, according to HSBC Holdings Plc.
The notes handed investors a 10 per cent return, HSBC Holdings Plc
indexes show, as consumer price increases slowed to a 12-month low and the
trade deficit narrowed.
India’s bonds advanced 7.1 per cent and China’s 4.9 per cent, the next
best performances among the region’s 11 biggest economies excluding Japan.
Vietnam’s bonds are also in demand this year as higher-yielding
securities will probably be least affected by rising treasury yields as the US
economy improves, said Sergey Dergachev, a senior portfolio manager in
Frankfurt at Union Investment.
Aberdeen Asset Management Plc (ADN) and Union Investment Group, which
oversee the equivalent of $526 billion in assets, say they boosted holdings of
Vietnam’s global debt in the past year.
“Vietnam is a good hedge for me against a possible rise in US Treasury
rates,” Sergey Dergachev said.
“Vietnam historically, and also as a high-yield credit, is less
susceptible to movements of US Treasury yields than Philippine and Indonesian
debt.”
Vietnam’s 6.75 per cent dollar bonds due January 2020 yield 326 basis
points, or 3.26 percentage points, more than similar-maturity US Treasuries,
while the yield premiums for the Philippines’ 6.5 per cent debt due January
2020 and Indonesia’s 5.875 per cent notes due March 2020 are at 146 basis
points and 170 basis points, respectively, according to data compiled by
Bloomberg.
Vietnam’s trade gap narrowed as slower lending growth curbed demand for
imports. The trade deficit was $150 million in March, down from $279 million in
February, preliminary figures from the statistics office showed on March 28.
Slower inflation limited domestic demand for foreign currency, easing
pressure for its currency (VND) to devalue and giving the central bank room to
bolster its foreign-exchange reserves.
Bloomberg
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