HANOI: Vietnam bonds fell on Monday, with yield at highs of 13 weeks as already weak demand was subdued further by high overnight interbank rates, analysts said.
The yields on two-year government bonds increased 0.015 point to 7.365 percent, the highest since May 7, according to Reuters fixings data. One-year bond yields rose 0.05 point to 6.42 percent, passing a May 20 peak.
The overnight interbank rate has surged more than three-fold to 4.4 percent on Monday from 0.97 percent a month ago, according to Reuters data.
Trading volume in the secondary market last week was slim at 3 trillion dong ($142 million), the lowest level this year, according to the Hanoi Stock Exchange data.
"There's now more interest in the interbank market. Failed auctions in the primary market also had a more negative impact on the current weak sentiment," said analyst Dang Luu Hung at Saigon Securities.
He said the money market could soon stabilise and volume of bonds traded should therefore pick up.
Last week the State Treasury failed to sell any of its three-year and five-year bonds. It sold just 200 billion dong worth of two-year bonds from 1 trillion dong offered.
That lack of appeal counters the trend in the first quarter, when Vietnam's bond market was one of the most active in the region.
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