In the recently released October 2024 corporate bond situation report, experts from FiinRatings Joint Stock Company assessed that the corporate bond market is recovering rapidly, but mainly in the bank bond group. Corporate bond issuance in the remaining corporate groups continues to be gloomy.
The issuance value of non-financial enterprises in September 2024 reached only VND5,400 billion, bringing the total issuance value in the first 9 months of the year to VND80,000 billion, down 26.3% over the same period. Most of these bonds are held by commercial banks and professional individual investors due to the lack of participation of other financial institutions.
The rate of late payment tends to increase more slowly, at 18.9% in the first 9 months of the year, FiinRatings experts explained that the improved macro situation and the recently expanded credit room have continued to support businesses' cash flow balance.
Corporate bonds maturing in the fourth quarter of 2024 are expected to exceed VND87.5 trillion, with 35% coming from the real estate group and 15% from the banking group. Notably, high risks are concentrated in the real estate bond group, especially in October and November, according to data from Phu Hung Securities Company (PHS).
According to PHS, the high maturity pressure will force many businesses to continue reissuing to raise capital in the fourth quarter of 2024. Therefore, bond issuance and repurchase activities will continue to be active in the coming time.
“We also maintain the view that the maturity pressure of the real estate group, which accounts for a large proportion of the total value of maturing and overdue bonds in the fourth quarter, will be a risk factor for the corporate bond market, especially if the real estate market does not recover as expected,” PHS commented.
Currently, there are still many conflicting opinions surrounding the restriction on individual investors from investing in individual corporate bonds.
In the draft amendments to the Securities Law, which are expected to be enacted in the fourth quarter of 2024, the regulator plans to introduce additional safeguards to reduce excessive risk-taking by investors, such as limiting private placement bonds to professional institutional investors.
Therefore, more active participation of institutional investors in the corporate bond market is very important for the sustainable development of the corporate bond market.
Dr. Nguyen Duy Phuong, Investment Director of DG Capital, said that promoting the participation of institutional investors in the corporate bond market is not only an international practice, but also more favorable in ensuring the healthy and sustainable development of the market.
Regulating and managing risks through the application of regulations and standards on risk management for investment institutions licensed and managed by the State Securities Committee and the Ministry of Finance will also contribute to market supervision, limiting risks and consequences compared to allowing individual investors to directly participate in buying and owning bonds.
However, among investors, there is still an opinion that if there is a subtle approach, by maintaining the core principle of protecting investors, but still achieving the goal of developing the capital market in a sustainable manner, then the removal of individual professional investors from the private bond playground needs to be carefully considered by the management agency.
