According to data from the Hanoi Stock Exchange, since the beginning of the year until February 26, the market has recorded 6 bond issuances by businesses, including 2 public issuances and 4 private issuances, with a total value of 5,350 billion VND.
The interest rates offered by the issuers for the initial periods are quite attractive. Specifically, the interest rates for the first 2 periods are 11% per year and 15% per year. The interest rates for the first 4 periods of BOT Ninh Thuan are 10.5% per year. The interest rates for the subsequent periods are usually 4 – 4.5% plus the average 12-month savings interest rate of the Big 4 banks…
High-interest bonds are still not attractive to investors.
Corporate bond interest rates for the banks are currently ranging from 5-7% per year, while this number for non-financial corporations is 7-12% depending on the level of risk or credit rating of the corporations.
Compared to the boom period of 2021 – 2022 of the corporate bond market, the bond interest rates have decreased significantly from over 20% per year. However, the current bond interest rates offered by the issuers are still quite attractive, even bringing double profits compared to bank deposits.
Despite bringing good profits, the corporate bond market has not yet become lively again in the first 2 months of the year, from both the perspective of the issuers and the investors.
Compared to the same period last year, when the market slowed down, the issuance of corporate bonds in the first 2 months of this year has shown better growth, but the volume of corporate bond issuances is still very small compared to the periods of 2021 and 2022.
Meanwhile, since January, the remaining provisions of Decree 65 have taken effect, causing many individual investors to be excluded from the corporate bond market while large players such as insurance companies, investment funds, etc. still hesitate to join the market.
In parallel with that, there is still significant pressure on the repayment of corporate bonds this year. Many issuing organizations have a very weak ability to repay debts, facing the risk of insolvency, while some issuing organizations are established solely for the purpose of fundraising, with virtually no revenue and cash flow from business activities, which has a significant impact on the fragile investor confidence.
According to reports from organizations, the value of high-risk bonds will slowly repay principal and interest this year, reaching 40,000 billion VND, accounting for 19% of the total due bonds. This number is significantly lower than the 147,000 billion VND in bonds that are behind in repaying principal and generating interest in 2023…
