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Thursday, June 13, 2024

What will drive corporate bonds in 2024?

By Thuy Le

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The resurgence of corporate bond issues in the last month of 2023 is a clear indication that this investment channel may gain traction in 2024. What are the main drivers that could support the corporate bond market this year? Sharp increase at the end of 2023 According to data from the Vietnam Bond Market Association (VBMA), corporate bonds with a total value of VND311.24 trillion were issued in 2023. While this figure is far from the VND595 trillion recorded in 2021, it still represents a 22% increase over 2022. Among these, there were 29 public offerings totaling VND37.07 trillion and 286 issues worth a combined VND275.03 trillion via private placement. Notably, in December 2023 alone, there were 55 issues of corporate bonds through private placement with a total value of VND42.8 trillion, which is 50% higher than that in the preceding month. Particularly, despite having an average term of 5.97 years, longer than the 5.64-year average of issues in November, the average coupon fell sharply to 7.06% per year from 8.6% in November. The falling bond coupons were seen aligned to adjustments of the interest rates on the market, as the end of 2023 also witnessed several banks slashing deposit […]
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