Banking & Finance

Many analysts believe that the draft amendments to Decree No. 153 from the government on the offering and trade of individual corporate bonds do not clarify the roles and responsibilities of financial intermediaries and agents, which create some confusion in the market. The Vietnam Chamber of Commerce and Industry (VCCI) proposes mandatory credit ratings as one of five fundamental solutions to stabilize the market.

The SSI Securities Company has forecast that demand for corporate bond issuances will remain high as production and business activities resume. It also believes that the corporate bond market will be active again once there are clearer policies from the government, and this could start from the third quarter of 2022.

Rising foreign remittances in recent times have greatly helped the State Bank of Vietnam (SBV)’s management over exchange rates. But as the USD is becoming stronger while remittances only help “contain” the USD/VND exchange rate in the short term, KB Securities Vietnam has forecast that the rate may increase 0.5-1 per cent in 2022.

Capital flows from exchange-traded funds (ETF) into Vietnam in the week between May 16 and 20 hit a record $115 million, according to KIS Securities. Most ETFs greatly appreciate the Vietnamese market thanks to its stable macroeconomy and high business growth.

According to analysts, the greatest obstacle facing the process of equitization and divestment of State capital relates to land and enterprise valuations. State-owned enterprises also lack an incentive to promote the equitization process. They are also operating profitably, thanks to monopolies in important areas of the economy, advantages in land and other resources, and receiving orders from the State.

VnDirect has forecast that Vietnam’s corporate bond market will be quiet in the short term, with issuance volumes in the real estate group continuing downwards over the next few quarters. Conversely, issuances in the construction group will increase as the government promotes public investment.