Investor confidence gradually restored
After a period of stagnation, the corporate bond market recorded positive developments in 2024 with a sharp increase in issuance value, especially in the last months of the year when market sentiment was more stable and investor confidence gradually recovered.
According to data from the Ministry of Finance, the total value of privately issued corporate bonds in 2024 reached VND396,700 billion, an increase of 33.6% compared to 2023. This is an extremely impressive figure after a period of sharp market decline.
The sharp increase in new issuance value shows clear signs of recovery and improvement. The structure of enterprises participating in the market is more diverse, enterprises from many industries such as banking, real estate, energy, etc. are actively seeking capital through this channel. Along with that is the increasingly dense appearance of green bonds, with the presence of both banking groups from Vietcombank, BIDV, SeABank, HDBank to non-financial enterprises such as Vinpearl, BIM Land, BIWASE, etc.
In 2024, the market can be seen to recover strongly in terms of issuance value, mainly from the banking sector - the industry group that plays a leading role in the market; the group of real estate businesses recovers at a slow pace but has many positive prospects next year.
New policies and laws that have recently come into effect aim to increase market transparency and protect investors, aiming for sustainable development. Typically, the Securities Law (amended) creates a tighter legal corridor, helping to increase transparency and protect investors, creating a solid foundation for a sustainable recovery of the bond market in 2025.
The ability of businesses to repay debts has improved.
2025 is forecast to be the peak year for bond maturity, with a large number of bonds issued in the 2020-2021 period maturing. However, the debt repayment capacity of businesses has improved significantly.
Notably, the early bond buyback activity is bustling. In 2024, many businesses stepped up early bond buybacks, even fully paying off all bond debts due and before the payment deadline such as: Dream City Villas Real Estate Trading Company Limited; Hung Yen Urban Investment and Development Company Limited; Phat Dat Real Estate Development Joint Stock Company; An Gia Real Estate Investment and Development Joint Stock Company, etc. This is a positive signal for the market, a driving force to regain investors' confidence in this important capital mobilization channel.
In addition, many businesses have restructured their debt, increased capital mobilization from other channels such as bank loans, international bond issuance or cooperation with strategic partners. At the same time, by allowing businesses to negotiate an extension of bond payment terms, the pressure to mature by the end of 2024 has significantly reduced. This shows that businesses, especially credit institutions, are proactive in debt management and improving their solvency.
These efforts, combined with flexible management measures from the regulatory agency, have created momentum for the corporate bond market to develop in the new period.
Forecasting the corporate bond market in the coming time, Mr. Le Quang Hung - Senior Director of Investment Analysis at Techcom Capital Fund Management Joint Stock Company commented that this investment channel will develop well in 2025, especially when the market has gradually recovered after experiencing major fluctuations in the period of 2022-2023.
Mr. Le Quang Hung analyzed that in 2024, the market will have a strong recovery in issuance value, but the main contribution will come from the banking sector, and the group of real estate enterprises will recover at a slow pace. In the coming time, when the real estate market recovers, it may lead to the need to issue new bonds for potential projects.
