I NDI VI DUAL ASSI GNMENT

FI M 305








Tran Cong Dinh FB 90026


I. Definition
A bond is an interest-bearing security that obligates the issuer to pay the bondholder a
specified sum of money, usually at specific intervals (known as a coupon), and to repay
the principal amount of the loan at maturity

II. Types of bonds in U.S.
U.S. Treasury Direct debt obligations issued by the U.S.
government, which uses the revenue from the
bonds to raise capital and make payments on
outstanding debt

Agency

Debt obligations issued by agencies of the U.S.
federal government or by private agencies, called
government sponsored enterprises , which are
federally chartered, but publicly owned by their
stockholders

Municipal Debt obligations issued by states, cities, counties,
and other public entities that use the loans to fund
public projects, such as the construction of schools,
hospitals, highways, sewers, and universities

Corporate Fully taxable debt obligations issued by
corporations that fund capital improvements,
expansions, debt refinancing, or acquisitions that
require more capital than would ordinarily be
available from a single lender

High yield Debt securities rated below investment
grade
2
based on the issuer's weaker ability to pay
interest and capital, resulting in the issuer paying a
higher rate to entice investors to take on the added
risk


2013

Net sales of bonds by private investors holding foreign hit a record high in
September to U.S. $ 18.3 billion, the highest level since March 2013.
Japan continues to threaten usurpation China to become the owner of the largest
foreign creditors of the U.S.. U.S. Treasury Department yesterday 16/11,
said in September, foreign investors remained net buyers of long-term
financial assets of America.
Holdings of U.S. Treasuries by China in September rose slightly to $ 300 million
1.155 trillion.
Meanwhile, Japan continues to strengthen U.S. bond purchases in recent months,
raising the country's holdings of bonds from 1.123 to 1.131 trillion in
September. As such, Japan continued to be the owner 2nd largest U.S.
creditors,
In the past 12 months, the U.S. Treasury holdings of China fell by $ 115 billion
while Japan's holdings increased by 147 billion dollars in the same period.
The reason that Japan buy U.S. debt is strengthened to protect the yen
from rising trend, a negative impact on the economy of this country.
According to the financial report of the U.S., foreign investors bought a net 17.3
billion in U.S. bonds and treasury bills in September, lower than the 42.9
billion dollars billion in August. Houses private foreign investors bought a
net 919 million U.S. bonds and treasury bills, compared with 19.2 billion
the previous month.
2014
Russian government may be forced to abandon the U.S. bond reserves and refuse to pay
bank loans in the U.S., after the Senate Foreign Relations Committee is planning
U.S. sanctions against Russia after the estate Council in Ukraine.
Russia is reducing the number of their foreign bond holdings. This is one of the basic
ways to reduce the weakening of the ruble. According to statistics, in February,
down 2% ruble against the U.S. dollar, the biggest decline in 24 months versus the
currencies of emerging markets

III. Vietnam's bond market
The bond market in Vietnam in the early months of 2014 also maintains a lively market
on both primary and secondary. In the primary market, more than 25,000 billion
State Treasury bonds, government-guaranteed bills and 3.000 billion was
released in February. On the secondary market, the total value of bonds traded at
nearly 53.000 billion.
Shown in a number of specific major, market size increased, the Government has
successfully mobilized about 190 trillion for the State budget, via the issuance of
bonds, bills, higher than 20% of the total the release of the 2012. Accordingly, the
market size increased by 42% compared to 2012 with approximately 550 trillion
of government bonds are listed on the market circulation.
Besides, the market liquidity of government bonds is markedly improved, the
average sales transaction gains sharply to approximately 1,400 billion / day,
almost twice than in 2012. Additionally, the participating active participation of
foreign investors accounted for nearly 20% of new issuance in 2013 was also
positively contribute to the diversification of the investor base and increase
market liquidity.


IV. Orientation for Vietnam bond market
1. Diversifying the investor base
- System diversified investor is a key factor in the market, fully consistent with the
objective of developing the primary market and the secondary market. In other
countries in the region, participants in the bond market includes various types of
investors such as social security institutions, insurance companies, financial
institutions
- To attract foreign investors in Vietnam, in addition to a number of tax incentives
to encourage them to participate, need to focus on developing in-depth market,
product diversification, as well as services on the market investors to help
organizations minimize risk when investing in Vietnam.

2. Perfecting mechanisms and policies for the development of market
- Potential development of the bond market Vietnam is still very large, therefore,
to unfreeze this market, should improve the mechanism of policy direction:
- Develop and promulgate policies and mechanisms for the establishment,
organization and operation of credit rating companies in the domestic market
- Develop mechanisms for coordination between the release of Treasury bills and
Treasury bills issued to ensure uniform development of the market and enhance
the close coordination between fiscal policy and monetary policy.