According to the Vietnam Bond Market Association, in the first two months of the year, the total corporate bond value issued to the public rose by 31 percent.

The over-growth of the corporate bond market in the past two years poses threats for the Vietnamese economy in the 2024-2025 period, when these bonds will reach maturity.

According to the World Bank and Global Knowledge Partnership on Migration and Development (KNOMAD), total remittances to Vietnam in 2021 may hit up to $18.1 billion, with about $6.5 - 6.6 billion for HCM City.

Realty bonds often catch special attention in the primary market thanks to attractive interest rates, even though warnings are often issued about their risks.

Credit institutions with a bad debt ratio of more than 3 per cent are forbidden to buy corporate bonds, according to the latest announcement from the SBV.

Some lots of real estate bonds issued under private offerings are expected to become due by the year end. The solvency of issuers amid the difficulties caused by Covid-19 remains questionable.

After continuously issuing warnings about investment in corporate bonds, the Ministry of Finance has decided to take strong action against companies issuing "problematic" bonds to prevent risky behavior to the market.

The fledgling property-backed bond market is tempting investors for its inviting high yields but experts still warn investors of potential risks of the products.

Corporate bonds issued by real estate firms account for a high proportion of securities that mature in three years. Experts warn of high risks if the real estate market cannot recover by that time.

The volume of corporate bonds without collateral or guaranteed only by shares issued in the first quarter of 2021 accounted for a large proportion, with a large part owned by real estate firms. This poses a significant risk.

The movement of issuing corporate bonds has cooled down, but the large number of bonds that have been issued with no collateral, or untrustworthy collateral, is viewed as a ‘bubble’ that may burst at any time.

Businesses are creating virtual assets by issuing corporate bonds, but experts warn that during the Covid-19 pandemic, a ‘bond bubble’ will bring high risks to the economy.

Investors have been invited to contribute capital to real estate projects and enjoy a profit of 36 percent per annum, and have also been persuaded to buy corporate bonds at a high interest rate of 18 percent per annum.

Many Vietnamese corporations have rushed to raise capital for plans to expand production and business activities amid the Covid-19 pandemic. The total mobilized capital is up to tens of trillion VND.

Companies are looking to raise debts from bond issuance before the amended Law on Securities takes effect next January.

Akihiko Iwatani, chief representative of Haseko Corporation in Hanoi, believes that Vietnam is the most attractive market in ASEAN for Japanese investors in particular and foreign investors in general.

Real estate enterprises outpaced banks to issue the largest volume of corporate bonds last month, according to a newly released report by SSI Securities Corporation.

Commercial banks remained the biggest bond issuers with VND79.4 trillion worth of bond issuance, accounting for 44.4 per cent of the total figure.

Commercial banks’ purchase of real estate corporate bonds is considered indirect lending to real estate firms, experts say.

Real estate firms are rushing to issue corporate bonds, which analysts say shows their thirst for capital. But there are risks.