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Wednesday, June 19, 2024

Revitalizing corporate bond market through diversification

By Van Phong

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Vietnam’s corporate bond market is holding medium and long-term growth potential through the diversification of its investor base and the enhancement of intermediary financial institutions engaged in bond guarantee operations. Market slump persists Vietnam’s corporate bond market, which posted robust growth from 2012 to 2021, including an annual growth rate of around 45% between 2018 and 2021, has been in decline since the second quarter of 2022. Regulatory actions against market violators and policy changes, coupled with unfavorable macroeconomic factors and high bank interest rates, have contributed to this downturn. As we move towards the end of the year, the market’s stagnancy continues. According to FiinGroup statistics, the total value of new bonds issued in the primary market in 2023 is VND140 trillion, with over 90% of the bonds issued via private placement. However, data from the Vietnam Bond Market Association (VBMA) and Hanoi Stock Exchange (HNX) showed no new bond issues in the first half of September 2023. Until September 18, there was only one corporate bond issuer – Bac A Commercial Joint-stock Bank – with a total value of VND500 billion. In contrast, companies repurchased bonds valued at VND2,225 billion during the month of September. Total bond buybacks […]
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