Factors that affect to the success of State Treasury issues Case study of Viet Nam government bonds

Abstract

Vietnam issued successfully sovereign bond to international market in 2014. The success of State Treasury issue in Vietnam as well as in global depends on several factors. Therefore, the purpose of this research is to investigate determinants that affect the successful issuance of Treasury bond and the impact of these factors on the sovereign bond issue in Vietnam. Initially, relevant factors that could affect the change of government bond yield are collected and analyzed according to empirical literature review. Then, it is examined whether the sovereign bond yield respond to modifications of internal and external determinants. The analysis focuses on informative and descriptive determinants of Vietnam bond yields. The results of this research reveals that there is no correlation between bond yields and public debt and gross domestic growth. On the other hand, low inflation rate affects negatively to the bond yield. A significant change in credit rating influence the change of government bond yield. The results also investigate that high accumulation of foreign exchange reserve has an impact on bond yields. However, Vietnam has just issued three course, therefore, it is difficult to provide accurate significant of each factors on Vietnam bond yield.