The Vietnamese bond market has been reactivated though it remains lackluster and individual investors’ confidence has declined after the shocks. However, the potential of the market is great, and even greater than the stock market.

The total value of corporate bond issuances was recorded at 42.783 trillion VND (1.86 billion USD) in the first half, according to data compiled by the Vietnam Bond Market Association (VBMA).

Commercial banks that underwrite and sell corporate bonds have to buy them back if investors so demand, the central bank has said.

State Bank of Vietnam (SBV) has taken unannounced inspection tours to 11 commercial banks and imposed sanctions on banks violating regulations on investment in corporate bonds.

Economists believe a newly released decree will rescue the corporate bond market, but in the long term it is necessary to restore investors’ confidence by establishing a transparent and responsible market.

Ministries and branches are consulting with the Ministry of Finance (MOF) on solutions to help disperse corporate bonds that will mature in 2023-2024.

While it is urgent to tackle the liquidity problem, a fundamental solution is regaining investors’ confidence and stabilising the corporate bond market, experts said.

Both management agencies and enterprises want to restore investors’ confidence in the stock and bond markets, saying that the cases of FLC, Tan Hoang Minh and An Dong are just "flies in the ointment".

The redemption of bonds before maturity and bond restructuring have eased  pressure on the corporate bond market. However, the market needs comprehensive reform after the last hot development campaign.

Where will the money will come from and who will implement the measures to ensure efficiency?

The confidence of investors is at such a low level that many are willing to sell corporate bonds at any cost to collect money at a high discount.

In the financial market, investors need to keep in mind the principle of high risk, high return. Therefore, the higher the bond yield, the greater the probability of default.

The size of the corporate bond market is estimated at some VND1,374 trillion, equivalent to 15% of GDP. The Government aims to raise this figure to 20% by 2025.

Minister of Finance Ho Duc Phoc said ministries and branches have agreed that civil and economic relations will not be criminalized.

Bond issuers sighed with relief after hearing the message from Prime Minister Pham Minh Chinh released at a conference on developing the capital market safely, transparently and sustainably late last week.

Since 2008, the Vietnamese stock market has gone through four difficult times, when the market was thought to collapse.

The case of Tan Hoang Minh has caused many investors to shrink back for fear of the collapse of the corporate bond market.

Though there were problems in the case of the Thu Thiem land auction, experts say that auctions should not be restricted, and businesses should not be treated as if they are a plague.

The Prime Minister on April 11 sent an urgent telegram directing ministries and branches to take measures to stabilize the stock market and corporate bond market.