State moves to sell bonds to foreigners

July 20, 2003 | 18:04

(0) user say

FOREIGNERS will be permitted to buy government bonds if a new decree submitted to government last week is approved.

Development Assistance Fund deputy general director Nguyen Van Quang said a recent shortage of capital for investment projects, especially large ones, was a problem.
The best way to raise capital was to issue minimum five-year bonds, he said.
By permitting foreigners and foreign organisations to purchase bonds, government officials hope the mobilisation of capital will be quicker and the liquidity of government bonds increased.
Foreigners and foreign organisations contacted last week by Vietnam Investment Review said they would be interested in investing in government bonds.
However, they also expressed caution, and said the government would have to ensure an attractive interest rate plus high liquidity of the bonds by strengthening enforcement of the securities market.
According to the draft decree, bond owners would be permitted to use them for sale, gifts, inheritance and collateral.
It also requires government bonds issued and paid in local currency to have a minimum face value of VND100,000 ($6.60).
Government bonds in foreign currency will be paid in foreign currency on expiry. According to the MoF, to date no government bonds in foreign currency have been issued.
A MoF official said government bonds in foreign currency would be issued for crucial projects at national levels which need foreign currency for payment, or projects appointed by the prime minister.

By Vu Long

vir.com.vn

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional