According to the report of the Vietnam Bond Market Association, from the beginning of the year to the date of information announcement on November 8, the whole country had 331 private issuances, worth VND 315,792 billion, but there were only 21 public issuances, worth VND 32,114 billion, accounting for 9.2% of the total issuance value.
VNDIRECT Securities Company commented that the recovery of private corporate bond issuance activities continued to be driven by the increase in issuance by the banking group.In the third quarter of 2024 alone, the banking group issued VND 119,307 billion in bonds, accounting for 81% of the total value of private corporate bonds issued in the quarter.
Following the banking sector is the real estate group, with the total value of individual corporate bonds issued in the third quarter of 2024 reaching VND 20,895 billion, accounting for 14.2% of the total value of individual issuance, up 41.8% compared to the second quarter of 2024, but still 40.2% lower than the same period last year.
Another positive sign is that many late issuers have partially repaid principal and interest to bondholders. Credit rating agency VIS Rating commented that the worst phase of the liquidity crisis from September 2022 to June 2023 has passed and the corporate bond market has entered a new development phase, marked by stricter regulations and gradually improving market sentiment.
According to data released by VIS Rating, from March 2023 to present, more than 200 bonds have extended their maturity dates, most of them by about 22 months, after reaching an agreement with investors.
With bond delinquencies falling and delinquent collection rates rising, issuers and investors are more optimistic and have been proactively adjusting to tighter issuance requirements.
Notably, many real estate businesses have recently stepped up bond buybacks and early bond redemptions, which has helped restore investor confidence in the market.
Meanwhile, the legal framework has been significantly strengthened thanks to new regulations from the Ministry of Finance and strict supervision from the State Bank. In particular, the requirement to list and publicize corporate bond information on the system of the Vietnam Securities Depository and Clearing Corporation has contributed to improving transparency and creating trust in the market.
However, to compensate for the lack of liquidity in the individual corporate bond market, experts recommend stronger solutions to encourage public bond issuance.
Dr. Nguyen Duy Phuong, Investment Director of DG Capital, said that the revised Securities Law could bring both challenges and new opportunities to the corporate bond market. For example, the draft revised Securities Law introduces new regulations to tighten the participation of individual investors in the private corporate bond market, but creates favorable conditions for foreign investors. Although the participation of foreign investors in the Vietnamese corporate bond market is still very limited (holding only nearly 3% of the value of outstanding bonds), the potential for market expansion from this group of investors is huge, as foreign investors often have investment experience, financial potential and high risk tolerance.
The latest draft of the Securities Law (amended) also does not tighten the conditions for issuing bonds to the public, but there is no move to "open" this field further.
According to experts, the reason why businesses are reluctant to issue bonds to the public is that the procedures for listing and issuing bonds to the public are currently complicated, lasting from 6 months to 1 year, and the requirements for information disclosure and information transparency are stricter. Therefore, it is expected that there will be a shortening of the time for administrative procedures in approving bond issuance dossiers.
