Real estate developers need huge capital to implement their projects

Techcombank has TCBF, VietFund has VFMVFB, Bao Viet has BVBF, SSI has SSIBF and Military Bank has MBBF.

The dong deposit interest rate is on the rise, with the highest rate, 8.5 percent per annum, offered by Ban Viet Bank, VIB and VPB. 

However, experts believe that in 2019, another investment channel will compete with depositing – investment in bonds.

The bond funds established by financial institutions are mostly in corporate bonds. Ninety-one percent of TCBF’s assets, for example, have been poured into corporate bonds, while the proportion is over 80 percent at SSIBF.

Investment funds are now excited about corporate bonds because capital mobilization is booming in Vietnam. The policies of the government have been amended in an effort to encourage the development of the capital channel.

The Decree 163, for instance, which took effect on February 1, 2019, sets a more favorable legal platform for bond issuers. They can issue bonds in many different campaigns and do not have to make profits in the previous fiscal year.

Meanwhile, the new request on banks to raise their charter capital to meet Basel II standards has forced commercial banks to seek long-term capital from bond issuance.

Commercial banks such as BIDV, Vietcombank, VIB and MB, and large corporations such as Novaland, Vingroup and Masan Group are all accelerating capital mobilization through bond issuance.

The promised fixed bond interest rates are all higher than deposit interest rates, averaging at 8-10 percent per annum. Camimex recently planned to issue 1-year bond with the interest rate of 12 percent per annum.

Bond issuers also offer preferences to attract investors. Vingroup bond holders can sell the bonds any time. Bond holders can receive real-time interest rates, while depositors can only get the on-demand deposit interest rates if they withdraw money before the maturity.

Rong Viet Securities said that bond investment is no longer the game of only professional institutions. Individual investors also invest in bonds through debt funds. Only VND1 million is needed to buyTCBF bonds.

Bonds funds had a successful 2018 year. According to Rong Viet Securities, TCBF bond yield was 8.5 percent, VFMVFB 10.6 percent, BVBF 9.9 percent and SSIBF 8.1 percent, which far exceeded that of equity funds and bank deposits.

2019 is believed to be a busy year for the corporate bond market as large corporations including EVN, Masan Group, Vingroup and Sungroup all plan to issue medium-term bonds worth tens of trillion of dong.

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H. Thanh