return icon Vietnamnet.vn

VN real estate firms issue bonds again

There are two typical characteristics of the real estate firms’ race to issue bonds – the high amount of bonds issued and the high interest rates.

Saigon Securities Incorporated (SSI) reported that VND17.071 trillion worth of bonds were issued in October 2019. Real estate firms surpassed commercial banks to become the biggest bond issuers with VND9.349 trillion worth of bonds issued.

 

{keywords}



While banks set the interest rates of 7-8 percent, real estate firms offer high interest rates of 11-13 percent, and some of them offer 20 percent.

According to the Hanoi Stock Exchange (HNX), Star Beach has issued VND150 billion worth of bonds with the interest rate of 18 percent, without mortgaged assets.

Most recently, Land Saigon attracted special attention from the public when issuing VND1.85 trillion worth of 3-year bonds with the interest rate of 11 percent per annum. The enterprise issued a big volume of bonds in the context of negative cash flow.

There are two typical characteristics of the real estate firms’ race to issue bonds – the high amount of bonds issued and the high interest rates.

Its Q3 finance report showed that in Q3 and the first nine months of the year, Land Saigon only had revenue from financial activities and had no revenue from sales. The debt to total assets ratio is up to 69 percent, mainly long-term debts.

Truong Hien Phuong from KIS Securities commented that issuing bonds in the context of negative cash inflow brings very high risks, to both issuers and investors.

According to Vuong Hoang Son from VnDirect Securities, real estate firms have increased the issuance of corporate bonds in recent months, which not only shows that bonds have become an important capital mobilization channel for real estate developers, but also shows that bonds are an attractive investment channel.

Son said enterprises have rushed to issue bonds because of the State Bank of Vietnam’s (SBV) policy on tightening credit provided to the real estate sector.

Meanwhile, commercial banks, when lending money to real estate firms, tend to convert the loans into bonds to have higher liquidity. As for real estate firms, they want to diversify capital mobilization channels to ease reliance on the stock market and bank loans.

Also according to Son, the average bond interest rate has increased by 0.5 percent point so far this year. The offering of high interest rate will negatively affect the solvency and profitability of business. However, the impact level will be very different.

Bui Quang Tin, a respected banking expert said that high interest rate is associated with high risk. At this time, the investment channels which can bring profitability of over 10 percent have high risks. He advised investors to pay attention to the transparency of bond issuers’ finance reports, and the legitimacy of real estate projects implemented by enterprises.

Linh Ha 

 

VN bond market reaches US$55 billion in nine months

VN bond market reaches US$55 billion in nine months

Vietnam continued to have the smallest local currency (LCY) bond market in emerging East Asia, with outstanding bonds of VND1.2777 quadrillion (US$55.1 billion) at the end of September.

Vingroup guarantees VinFast’s loans and bond issuance

Vingroup guarantees VinFast’s loans and bond issuance

Vingroup said it will guarantee payments worth VND30 trillion (US$1.3 billion) for the obligations of VinFast Manufacturing and Trading Co., Ltd. related to the issuance of corporate bonds and domestic and foreign loans in the 2019-20 period.  

MORE NEWS

VIETNAM BUSINESS NEWS JUNE 26

Agricultural sector ensures food security, exports

Vietnamese become famous for gold-wearing ‘hobby’

The hobby of wearing gold all over the body has attracted the attention of the public, even foreign news sites.

Hue Festival 2022 opens with glamor show

The week-long Hue Festival 2022 was kicked off on June 25 evening by a unique art programme and Ao Dai (Vietnamese traditional gown) show.

Bach Long Glass Bridge - A news tourist attraction in Moc Chau

A glass-bottomed bridge named Bach Long (White Dragon) was recently inaugurated in Moc Chau and it has immediately become a new tourist attraction.

Vietnam among few countries totally re-open int’l tourism market

Vietnam is the only only Southeast Asian country that has reopened international tourism without any COVID-19 restrictions, the World Tourism Organization (UNWTO) said.

Foreign Ministry spokeswoman’s story of being a writer

Assistant to Minister of Foreign Affairs, Spokesperson of the Ministry of Foreign Affairs Le Thi Thu Hang says journalism not only means reporting information, but it also has the function of leading public opinion.

Another S.Korean airline resumes direct service to Khanh Hoa

An Air Seoul flight carrying 187 passengers from the Incheon international airport arrived at the Cam Ranh International Airport in Khanh Hoa Province on June 24.

Interest subsidy vs monetary loosening

Some recent reports have indicated that the monetary policy of the State Bank of Vietnam (SBV) is not in sync with the global trend.

Developers expect smoother LNG policy planning

In Vietnam, about 20 LNG-fired power projects are in the pipeline. Some of these programmes, however, have yet to identify a fuel source.

National Assembly Chairman arrives in Budapest for Hungary visit

A high-ranking delegation of the National Assembly (NA) of Vietnam led by NA Chairman Vuong Dinh Hue arrived in Budapest on June 25 afternoon (local time), beginning an official visit to Hungary.

Next Top model crowned Miss Universe Vietnam 2022

Ngoc Chau, the winner of Vietnam’s Next Top Model 2016, was crowned Miss Universe Vietnam 2022 at a grand finale held in Ho Chi Minh City on June 25 evening.

WB, FTSE Russell pledge regular coordination in upgrading Vietnam's stock market

Representatives of the World Bank (WB) and FTSE Russell have committed to further supporting Vietnam to build a sustainable stock market, particularly via regularly exchange and coordination in the market upgrading matter.

Regions, sub-regions must be linked for development

In 2004, the Politburo released Resolution No 39-NQ/TW on socio-economic development and assurance of national defense and security in the northern part and southern coastal area of the central region by 2010.

Ensuring information security for digital platforms the top priority

Deputy Minister of Information and Communications Nguyen Huy Dung stressed that ensuring information security for digital platforms must be considered the key task, inseparable from the digital transformation process.
back_to_top