The government has submitted to the National Assembly for approval that by 2025, this ratio will be 20%, indicating the huge potential and momentum for development of this market. However, after unfavorable information related to some bond-issuing enterprises in 2022, the corporate bond market is no longer as “hot” as before.
 |
In terms of structure, Vietnam’s corporate bond market is concentrated in the real estate sector, with the largest proportion of about 37% in 2021. After 2022, the issuance volume of this group decreased significantly, however, in the overall market, this is still a group with high risks and a large proportion.
According to statistics on the proportion of corporate bond issuance and even looking at the violations in bond issuance and capital mobilization recently, it can be seen that most of them come from private bond issuance.
Here, we can see a mismatch in the management of different types of bonds. The regulations are somewhat stricter for bonds issued to the public but looser for private bonds. The issuance of private bonds often comes with “three nos”: no collateral, no credit rating, and no payment guarantee. When violations are discovered, state agencies amend and supplement with fairly strict regulations, such as Decree 65, which defines professional investors as those who must have a certificate and hold an investment portfolio worth VND 2 billion or more for six months to be able to buy and sell private bonds.
Given such issues, it is important for market participants to take action to ensure increased transparency and provide accurate information.
In the short term, bonds maturing soon account for a large proportion, amounting to more than VND 700 trillion in the period of 2023-2025, according to Mr. Can Van Luc, an economic expert quoted by Tri Thuc Magazine. Therefore, these enterprises need to have the opportunity to negotiate and reach an agreement with bondholders to avoid bankruptcy, especially in the context of the global economy currently in a downturn.
In the long term, for enterprises, the first thing is to have ethics in business, operating on the basis of integrity to exist. Enterprises need to build a business plan that suits their capital usage plan, so that they can offer the type of bond that suits not only the needs and tastes of investors but also their capital demands. Another important step is to regain trust by actively disclosing and explaining financial information and corporate health so that a large number of bond investors can grasp, understand, and accompany the enterprise.
The group of intermediary organizations must comply with the law on the licensing process and must clarify their roles and responsibilities to avoid confusion for bond buyers.
Investors need to thoroughly research the information of the enterprise issuing the bonds they want to purchase, analyze and evaluate the provisions of the law with the terms and conditions in the bonds. If necessary, investors can consult experts to have appropriate and effective investment strategies.
Management agencies need to actively monitor and anticipate market situations before issuing policies to avoid passivity. They can also establish and form a separate corporate bond exchange to ensure standardized declarations, centralized control, and combine them with requirements for widespread information disclosure.
Credit scoring is also an important step to help investors gain more information about the enterprise. Enterprises in high-risk sectors with large capital demands, such as real estate, need to commit to protecting investors’ interests, such as payment guarantees or collateral. In addition, specific regulations are needed to avoid cross-ownership and information interference, combined with strengthened inspection and strict handling of intentional violations, to create a strong legal corridor for the market.
Vo Quoc Thang
The most extensive bribery case ever in Thanh Hoa: Numerous suspects prosecuted for “Giving and Receiving Bribes”
The Provincial Security Investigation Agency (PSIA) of Thanh Hoa province announced on January 31st that it has made the decision to initiate a prosecution against 23 individuals in connection with the offenses of “Accepting bribes” and “Giving bribes” as stipulated in Article 354(3) and Article 364(2) of the Criminal Code.
Accelerating disbursement of the 120 trillion VND credit package for social housing
Deputy Prime Minister Trần Hồng Hà has recently issued directives regarding the implementation of the 120,000 billion VND credit package for investors and buyers of social housing, workers’ housing, and projects for the renovation and construction of apartment buildings.
“Prosecution of government officials, land registration officers, and tax department employees in the largest bribery case ever”
The Thanh Hoa Police Investigative Agency has initiated legal proceedings against 23 individuals involved in the crimes of “Bribery” and “Receiving bribes”. This is the largest bribery case in terms of the number of suspects ever discovered and apprehended by the Thanh Hoa Police.
Mobile World achieves revenue of VND118,000 trillion: TVs, tablets, and phones all decrease by 10% – 50%, while one product grows in both quantity and revenue.
Mobile World Investment Corporation (MWG) has recently announced its 2023 business results. According to the report, the company’s consolidated revenue reached over 118 trillion Vietnamese dong, equivalent to 89% of the revenue in 2022.
Vietnam’s Irresistible ‘Specialty’ That China Desperately Wants to Revive: Highly Popular from the US to Asia, Bringing in Millions of Dollars
Vietnam is one of the largest exporting countries in the world, along with China and the Philippines.
