Topic: Corporate bond market

The concerns surrounding Vietnam’s corporate bond market must be remedied for it to properly act as a financing source.

A recent seminar hosted by Vneconomy/Vietnam Economic Times heard that addressing four specific bottlenecks would greatly assist the development of Vietnam’s corporate bond market.

After posting a sizeable year-on-year decline in the first quarter of 2024 from shocks that first occurred in late 2022, stakeholders in Vietnam’s corporate bond market believe certain measures are needed to restore confidence among investors.

The corporate bond market expected to account for 25% of GDP by 2030.

Close watch to be made over bond issuers with debt payment difficulties.

At a seminar on the development of the corporate bond on September 13, analysts said the market has grown 30-35 per cent annually in recent years. If such growth can be maintained, the total market size will reach VND11.2 quadrillion ($473.68 billion) in the next six years, thus easing capital pressure on banks and credit institutions.

The Ministry of Finance will compile a list of bond-issuing businesses showing unusual signs, such as “hidden” issuances by subsidiaries in the same ecosystem, issuances with high interest rates, and outstanding loans many times larger than equity. It has also assigned the State Securities Commission to review and amend regulations relating to the offering and trading of corporate bonds.

According to a report from the Ministry of Finance (MoF) sent to the Prime Minister, a number of real estate businesses have issued bonds in volumes many times higher than equity, creating risks not only for investors but also for the financial system. The ministry has adopted many solutions to correct the market in 2022, including submitting a proposal to the Prime Minister on amending the legal framework on certain matters.