Strong increase in issuance volume, diverse bond structure
The corporate bond market is showing positive signs of recovery with increased liquidity in the secondary market and diversification in the structure of new issuers from many different industries.
Banks are still the main players in the corporate bond market. Since the beginning of the year, banks have always been leading in the value of newly issued bonds to supplement the structure of medium and long-term capital sources in the context of gradually recovering loan demand.
Along with the excitement of bank bonds, the issuance structure by industry is also more diverse with strong increases recorded in the manufacturing, trade, and service sectors... Some non-banking enterprises that issued large amounts of bonds in October include Vinfast (VND 6,000 billion), Vinhomes (VND 2,000 billion) and Vietjet (VND 2,000 billion).
In particular, October recorded a VND1,000 billion bond lot issued by I.D.I Multinational Investment and Development Corporation (in the aquaculture sector) guaranteed by GuarantCo. This is also the first green bond lot issued by a non-financial enterprise this year.
According to VIS Rating's October bond market report, the amount of corporate bonds issued in the first 10 months of the year reached VND366,000 billion, higher than the total issuance for the whole year of 2023.
The situation of late payment also had more positive developments when the market did not record any new batch of late payment bonds in two consecutive months of September and October.
By the end of October, the total value of corporate bonds with delayed payment obligations was estimated at VND204,400 billion, accounting for about 20% of the outstanding corporate bond debt of the entire market. The maturity pressure in the remaining two months of this year is quite light with the amount of corporate bonds maturing estimated at VND20,000 billion.
Will continue to accelerate at the end of the year
Notably, the recent positive moves by the Ministry of Finance to encourage businesses to issue bonds to the public are an important boost for the corporate bond market. Decree No. 65/2022/ND-CP issued by the Ministry of Finance requires businesses to provide transparent and complete information when issuing individual bonds, and apply stricter monitoring measures.
In addition, the Draft Amendment and Supplement to the Securities Law on the one hand tightens the regulations on conditions for public offering, "adjusting" the market to a "playground" for professional investors, on the other hand opens the door wider to foreign organizations and individuals considered professional securities investors, improving the quality of the market in the direction of safety, health and transparency.
Assessing the current corporate bond market, Dr. Can Van Luc - an 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 organize and implement well the Financial Strategy until 2030 along with prioritizing institutional improvement.
At the same time, improve the infrastructure of the stock market in general and the corporate bond market in particular, especially improve the quality of the system of credit rating organizations, the centralized secondary market, the information and data base on the bond market, investors, collateral assets, etc.
Forecasting the corporate bond market in the coming time, analysts from MBS Research said that corporate bond issuance activities will be more active in the fourth quarter, as capital demand from businesses recovers in the context of the real estate market starting to warm up and the need to expand production and business is actively following the economic recovery. Accordingly, the banking group will continue to promote bond issuance to supplement capital to meet lending needs.
