Corporate bonds are a lifebuoy for VN real estate firms

As commercial banks have tightened real estate credit, realtors are seeking capital from corporate bonds.

Phat Dat Real Estate Development (PDR) has announced the issuance of VND550 billion worth of non-convertible bonds, for the third time this year. If successful, Phat Dat would mobilize VND850 billion from bond issuance.

Corporate bonds are a lifebuoy for VN real estate firms

Other real estate firms, including Novaland, TTC Land and TNR, have also been seeking capital via bond issuance campaigns. Novaland, for instance, has issued VND1.5 trillion worth of bonds, while TTC Land VND470 billion.

Meanwhile, Vingroup is the biggest issuer, offering to sell 20 million non-convertible bonds valued at VND2 trillion.

For a long time, real estate firms have been relying on bank loans to develop projects. However, they cannot do this anymore as the State Bank has set a roadmap on gradually restricting lending to the real estate sector.

The State Bank’s policy has shown its effects: in 2018, credit grew by 12 percent, while the real estate credit grew by 5 percent only, while the fourth quarter of the year witnessed a minus growth rate.

The State Bank’s policy has shown its effects: in 2018, credit grew by 12 percent, while the real estate credit grew by 5 percent only, while the fourth quarter of the year witnessed a minus growth rate.

As the capital flow from banks has stalled, the real estate markets of Hanoi and HCMC have become less busy.

A report found that the real estate supply in Hanoi in Q1 2019 decreased by 25 percent compared with the same period last year. In HCMC, the decrease was 50 percent.

Analysts said they can see clear signs of the two markets freezing and the trend will be seen in other markets as well.

 

Thr deputy chair of the Vietnam Real Estate Association Nguyen Manh Ha said the real estate market bears influences from domestic macroeconomic conditions, the global economic performance and changes in policies related to real estate.

It is expected that real estate credit would be controlled even more tightly as the State Bank is collection opinions for the draft circular to replace Circular 36.

The central bank wants to cut the proportion of short-term capital used for long-term lending to 30 percent and lift the risk coefficient from 50 percent to 150 percent for individual loans for living needs with the principal of VND3 billion or higher.

In such a context, real estate firms have to look for other capital channels, including shares, bonds and cooperation with foreign partners.

According to Rong Viet Securities the average bond yield is stable at 8-10 percent per annum for normal 1-3-year term bonds, far higher than the bank deposit interest rate of 6.6-7.3 percent per annum.

The higher interest rates have attracted many investors, according to Le Hoang Chau, chair of the HCMC Real Estate Association.

Nearly VND38.5 trillion worth of corporate bonds have been issued so far this year.

Kim Chi

Developing bond market can help satisfy demand for capital

Developing bond market can help satisfy demand for capital

Vietnamese enterprises are in dire need of capital to expand production and business, but the current development of the capital market cannot meet this demand. 

VietinBank to issue bonds worth $427.5 million

VietinBank to issue bonds worth $427.5 million

The State Bank of Viet Nam has approved the plan submitted by the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) to issue bonds worth VND10 trillion (US$427.5 million).  

 
 

Other News

.
Trinh Van Quyet’s transaction canceled, securities accounts blocked
Trinh Van Quyet’s transaction canceled, securities accounts blocked
BUSINESSicon  12/01/2022 

An unreported transaction made by Trinh Van Quyet, Chair of FLC Group, worth VND1.6-1.8 trillion on January 10 has been canceled as he did not report the deal.

Vietnam first Southeast Asian country to earn over US$1 billion from exports to Hungary
Vietnam first Southeast Asian country to earn over US$1 billion from exports to Hungary
BUSINESSicon  12/01/2022 

Vietnam has become the first Southeast Asian nation to earn over 1 billion USD from exporting goods to Hungary and the European country’s leading exporter from this region since 2000, according to the Ministry of Industry and Trade.

Vietnam has 683,600 operational firms: economic census
Vietnam has 683,600 operational firms: economic census
BUSINESSicon  12/01/2022 

As of December 31, 2020, Vietnam counted 683,600 operational enterprises, up 35.3 percent from 2016, the 2021 economic census revealed.

Hanoi to welcome launch of 26,000 apartment units in 2022: C&W Vietnam
Hanoi to welcome launch of 26,000 apartment units in 2022: C&W Vietnam
BUSINESSicon  12/01/2022 

Around 26,000 apartment units are expected to be launched in Hanoi in 2022, signaling a vibrant outlook for the segment, according to real estate service provider Cushman & Wakefield (C&W) Vietnam.

Laos top recipient of Vietnam’s overseas investment
Laos top recipient of Vietnam’s overseas investment
BUSINESSicon  12/01/2022 

Laos has been the largest recipient of Vietnam's overseas investment so far, with 209 projects totalling 5.1 billion USD in registered capital, Minister of Planning and Investment Nguyen Chi Dung has said.

Top 5 commodity brokers in Vietnam revealed
Top 5 commodity brokers in Vietnam revealed
BUSINESSicon  12/01/2022 

The five companies holding the largest commodity brokerage market shares in Vietnam sustained their positions in 2021, according to the Mercantile Exchange of Vietnam (MXV).

VN auto market grows slightly in 2021
VN auto market grows slightly in 2021
BUSINESSicon  12/01/2022 

Vietnam’s automobile market recorded slight growth in 2021, data from manufacturers showed.

Vietnamese billionaire sells shares without necessary report
Vietnamese billionaire sells shares without necessary report
BUSINESSicon  11/01/2022 

The State Securities Commission (SSC) has released a notice about a stock transaction without a report from Trinh Van Quyet, President of FLC Group.

Vietnam's tourism revives, starts again from scratch
Vietnam's tourism revives, starts again from scratch
FEATUREicon  12/01/2022 

The market is completely new after Covid-19. All players, small and large, will be at the starting point. Those who have a good start will obtain more market share.

Distressed by Covid-19, wind power developers want FIT to be extended
Distressed by Covid-19, wind power developers want FIT to be extended
FEATUREicon  12/01/2022 

Unable to have commercial operation date (COD) prior to November 1, 2021, many wind power investors have fallen into dilemma.

Telecom providers launch Mobile Money service
Telecom providers launch Mobile Money service
BUSINESSicon  11/01/2022 

Telecommunications isn't the booming industry it once was, thanks to the mobile market becoming saturated in recent years. This shift is forcing telecom providers to look for "new spaces" - one of which is Mobile Money.

Vietnam aims for 8% export growth this year
Vietnam aims for 8% export growth this year
BUSINESSicon  11/01/2022 

Although much of the economy was impacted by the fourth wave of COVID-19 in 2021, Viet Nam’s imports and exports reached a record of nearly US$670 billion, an increase of almost 23 per cent from 2020.

Vietnam coffee industry targets US$6 billion export value in 2030
Vietnam coffee industry targets US$6 billion export value in 2030
BUSINESSicon  11/01/2022 

The Viet Nam Coffee and Cocoa Association has targeted a coffee export turnover of US$5-6 billion in 2030, doubling the export value at present.

Three border crossings to reopen in Quang Ninh
Three border crossings to reopen in Quang Ninh
BUSINESSicon  11/01/2022 

China will resume customs clearance at three border crossings in Quang Ninh Province from January 11, according to the Ministry of Industry and Trade.

Largest-ever support package to strengthen farmers
Largest-ever support package to strengthen farmers
BUSINESSicon  11/01/2022 

The Government has just submitted a support package of VND350 trillion (US$15.43 billion) for socio-economic recovery and development to the National Assembly.

Treasures hidden in forests, bring high profit to farmers
Treasures hidden in forests, bring high profit to farmers
BUSINESSicon  11/01/2022 

Ngoc Linh ginseng lives under the canopy of old forests, with a forest coverage level of 70-80 percent and temperature of below 25oC. Businesses are now joining forces with locals to grow Ngoc Linh ginseng there.

Home-appliance distributors bargain products away, shut down after incurring big losses
Home-appliance distributors bargain products away, shut down after incurring big losses
FEATUREicon  11/01/2022 

Home appliance distributors have had a tough year 2021 because of Covid-19.

Real estate market anxiously awaits new regulations
Real estate market anxiously awaits new regulations
FEATUREicon  10/01/2022 

The National Assembly this morning began discussing the amending of eight laws.

Some hotels manage to survive the pandemic
Some hotels manage to survive the pandemic
FEATUREicon  11/01/2022 

Going digital, using staff for multiple tasks, and opening new businesses, hotels have been struggling to survive the second year of the pandemic.

Tet online sales kick off one month before Tet
Tet online sales kick off one month before Tet
FEATUREicon  10/01/2022 

Everything now can be purchased online, from food for Tet parties to smartphones.

 
 
 
Leave your comment on an article

OR QUICK LOGIN