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Update news corporate bond markets
The corporate bond market has stagnated, with new issues taking a nosedive to a mere VND14.8 trillion year-to-date.
The pressure of corporate bonds maturing in 2024 remains significant, with many businesses needing to pay trillions of Vietnamese dong in bonds that are due for investors.
In addition to simplifying issuance regulations, experts also said that a comprehensive solution is needed to remove legal barriers and develop investor bases.
Few companies are disclosing their plans to issue corporate bonds in 2024, except for some banks such as Vietcombank and VietCapital Bank.
Thanks to the government’s attempt to influence the economy plus decreasing bank interest rates, the corporate bond market has gradually recovered.
The bond market experienced a noticeable improvement in the latter half of 2023, but businesses still face challenges when it comes to issuing bonds in 2024.
Commercial banks have spent trillions of Vietnam dong to buy back bonds before maturity in the last months of this year.
Corporate bond buybacks before maturity had amounted to VND230.2 trillion in the year to December 25, up by 5.8% year-on-year, according to the Ministry of Finance.
The batch was worth VNĐ2 trillion with a rate of 12 per cent per year.
Positive signs in the corporate bond market have been seen recently. The government has paid attention to developing the market into an effective capital mobilization channel for the national economy.
Vietnam’s government bond yields climbed across all tenors for September 1 - November 10 driven by a rise in inflation and the US Federal Reserve’s decision to keep interest rates high for an extended period.
Nearly 70 companies have been added to the list of enterprises that have delayed payment of both interest and principal on corporate bonds as of today, totaling around VND160 trillion, according to the Vietnam Bond Market Association (VBMA).
Prime Minister Pham Minh Chinh has urged greater efforts to promote credit access, thus boosting corporate bond and real estate markets in a safe, healthy and sustainable fashion.
The corporate bond market has seen significant improvements since the second quarter, characterized by a notable increase in new issues, according to the Ministry of Finance.
Total corporate bonds set to mature in 2024 will reach 329.5 trillion VND (13.5 billion USD), the highest in three years, according to a report by the Ho Chi Minh City Real Estate Association (HoREA).
Companies, especially property developers, are engaging in negotiations with bondholders to extend bond redemption dates amid a sluggish property market and reduced cash flows.
Less than 10 per cent of corporate bonds have been registered on the Hanoi Stock Exchange’s trading platform, falling behind schedule and prompting discussions on extending trading regulations.
A number of businesses have reported losses or profit decreases of up to trillions of dong after biannual reviews, though they had reported large profits before. But this was not a surprise, especially for real estate firms.
Businesses had bought back over VND145.2 trillion worth of bonds before maturity in the year to August 11, a 39% year-on-year increase, according to data from the Vietnam Bond Market Association (VBMA).
Vietnamese enterprises are issuing corporate bonds in the international market as they have found it difficult to mobilize capital domestically after a number of scandals. However, this has been the choice of only some large enterprises.