Reform platform creates momentum for the capital market
Mr. Bui Hoang Hai - Vice Chairman of the State Securities Commission - commented: "The four pillars of the Resolution, in which Resolution 68 is especially meaningful to the private economic sector, have been issued. The Government management apparatus has been streamlined, the merged provinces and cities have opened up new economic space, the two-level management authorities have come into operation... All of that has happened while economic growth is still stable and positive". In that context, the capital market, especially the stock market, plays a key role in leading cash flow for long-term growth.
Mr. Hai said that the debt capital segment still needs reform, with the scale of government and corporate bonds still low, the investor structure is not diverse and there is a lack of issuance guarantee institutions. Bond investment funds have not yet promoted their role as long-term support for the market.
To overcome this, the SBV is drafting a amendment to Circular 98, in which it raises the investment limit of funds in corporate bonds, while encouraging the development of infrastructure funds, ESG funds and sustainable financial products such as green bonds and carbon credit bonds. This is considered a new direction to expand the scale and quality of the debt capital market, adding long-term capital to the economy.
The gap with the area and room for growth is large
Mr. Do Ngoc Quynh - Vice Chairman of FiinRatings, General Secretary of the Vietnam Bond Market Association (VBMA) - said that by the end of 2024, the total outstanding debt of Vietnamese corporate bonds reached about 1.25 million billion VND, equivalent to 10.8% of GDP. This figure is still far from the target of 25% GDP by 2030 set by the Government and is even more modest compared to the rate of 30-40% GDP in Korea, Thailand, Malaysia or over 100% in the US and Japan.
According to Mr. Quynh, it is necessary to overcome some bottlenecks such as: Limited investment institutions, mainly still relying on commercial banks; the quality and transparency of goods are not uniform; the mechanism of credit guarantee, credit rating and risk management has not fully promoted its role and the information infrastructure, transactions and supervision still need to continue to be improved.
The opening and strong development of the domestic capital market, especially the corporate bond market, is a prerequisite to reduce dependence on bank credit.
On the side of businesses, Ms. Nguyen Tam Anh - Deputy General Director of Karofi Group - said that the process of mobilizing capital through bond channels still poses many challenges compared to bank loans. Issuance procedures are complicated, requiring transparent and detailed financial data preparation, causing businesses to usually take 12 to 18 months to complete documents.
New direction for the Vietnamese capital market
For the Vietnamese capital market to break through, according to experts, legal reform, information transparency and product diversification will be important keys.
Mr. Saurabh Kumar - Director in charge of the Southern Asia and Southeast Asia Debt Market of BNP Paribas - said that the liquidity of the market is currently limited, making it difficult for investors to buy and sell and transfer.
He emphasized that businesses need to change short-term thinking, shifting to close cooperation with investors to find long-term solutions, even in difficult times. This is also a way for the market to build trust and attract sustainable capital flows.
