Developing a yield curve and establishing a comprehensive database on bond issuers and their debt repayment histories would provide investors with crucial insights, enabling them to assess whether corporate bonds are overvalued or undervalued. Such tools could help mitigate risks in the corporate bond market, particularly for less experienced investors. Gray areas in the bond market Vietnam’s corporate bond market has attracted a rising number of inexperienced investors. Nguyen Quang Thuan, chairman of FiinGroup, pointed out instances where investors without proper knowledge of the stock market have encountered difficulties. He mentioned a case where a doctor was struggling to resell VND7 billion worth of real estate bonds though there were assurances that they were “safe bonds” with a buyback guarantee. Similarly, Thanh Hang, a Hanoi resident who holds VND1 billion in bonds, is concerned about the bleak prospect of her getting back principal. She invested in bonds issued by a subsidiary of a large real estate corporation, assuming that bonds from such a company, secured by assets, were safe. However, she overlooked crucial factors like the company’s creditworthiness, the viability of its projects, and the reliability of its repayment guarantees. These risks are not limited to individual investors. Institutional investors […]
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