The market is gradually stabilizing.
The Vietnamese corporate bond market in the last months of 2024 is showing clear signs of recovery and improvement with a sharp increase in issuance volume and a more diversified structure of newly issued bonds by industry group.
According to the Vietnam Bond Market Association (VBMA), in November 2024, there were 29 separate corporate bond issuances on the market with a total value of VND 24,388 billion. In the first 11 months of 2024, the total value of corporate bond issuance reached VND 374,830 billion, exceeding by more than 10% compared to the issuance value for the whole year of 2023.
In particular, the leading banks with total issuance value always account for over 70% of the total issuance volume of the whole market. In particular, a significant proportion of bonds issued by the banking group are Tier 2 capital bonds with long terms (7-15 years) and attractive interest rates, helping banks consolidate their own capital, and at the same time being a highlight for the stability of the market.
Regarding the real estate group, recently, a series of big names such as Vinhomes, Becamex, Nam Long... and many businesses have simultaneously promoted capital mobilization through this channel. The reason why real estate bonds are heating up is partly because the market has gradually shown signs of recovery in recent times. In particular, the passage of the 3 Laws on Real Estate Business, Housing and Land has created a strong effect, contributing to clearing liquidity, thereby attracting cash flow into the real estate sector.
According to Vietnam Investors Service (VIS), positive improvements in the corporate bond market are reflected in the steady growth in bond issuance.
November 2024 recorded only 11% of issuers with credit profiles of “below average” or weaker, a significant improvement from 25% in the first 10 months of 2024. The majority of weak issuers are in the residential real estate and construction group, but this group is gradually improving its financial situation.
Notably, the recently passed amended Securities Law tightens the market by adding regulations on conditions for public offerings, “shaping” the market into a “playground” for professional investors, and on the other hand opens the door wider to foreign organizations and individuals considered professional securities investors, improving the quality of the market in a safe, healthy and transparent direction.
Forecast to continue accelerating in 2025
Assessing the current corporate bond market, Dr. Can Van Luc - economic expert - said that the Vietnamese corporate bond market has many opportunities but also many risks and challenges that need to be fully identified.
For the corporate bond market to recover and develop sustainably, it is necessary to consolidate and regain investor confidence at least until the end of 2025. In the medium and long term, it is necessary to well implement the Financial Strategy until 2030 along with prioritizing institutional improvement.
At the same time, perfect the infrastructure of the stock market in general and the corporate bond market in particular, especially improving the quality of the system of credit rating organizations, the centralized secondary market, the information and data base on the bond market, investors, collateral, etc.
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.
Recently, new policies and laws have been introduced to increase market transparency and protect investors, aiming for sustainable development. According to the expert, corporate bonds are gradually regaining investor confidence, so many institutions expect the market to develop better in 2025.
