Corporate bond issuances in Vietnam up 7.4% to US$5 billion in Jan-Jun
Strong growth of the corporate bond market in the January – June period has laid solid foundation to gradually form a capital channel in mid- and long-terms for enterprises.
Total corporate bond issuances in the first six months of 2019 reached VND116.08 trillion (US$5 billion), up 7.4% year-on-year, according to the Ministry of Finance (MoF).
Illustrative photo.
|
Coupon rates of corporate bonds averaged 9.5% - 11% per annum, 0.5 percentage points higher than the lending rates of commercial banks.
As of the end of June, the capitalization of Vietnam’s corporate bond market was equal to 10.22% of the country's GDP, up 21% year-on-year and exceeding the target of 7% of GDP set for 2020.
Deputy Minister Vuong Dinh Hue said the local corporate bond market has been growing at a rapid rate due to huge capital needs of the businesses.
Meanwhile, the government has tightened credit growth limit, especially in risky sectors such as real estate.
Hue said the strong growth of the corporate bond market in the January – June period has laid solid foundation to gradually form a capital channel in mid- and long-terms for enterprises, relieving pressures for banks.
Moreover, the maturity period of corporate bonds is lengthy, of which the 5-year maturity period accounted for 66% of total bonds issued, with the majority of investors being organizations, while individuals made up 6.1% of the total.
Hue, nevertheless, noted that without appropriate supervision of the corporate bond issuance could lead to risks to the credit market and the macro economy.
Coupon rates of bonds issued by certain companies ranged from 13 – 14%, even 14 – 15% per annum in case of some property companies, Hue stated, adding corporate bond issuers have not been rated, posing potential risks to investors, especially individual ones without sufficient knowledge of the market.
Hue also warned 70% of enterprises issuing bonds using assets which have not been assessed by an independent audit firm or certified of not involving in legal issues.
14:39, 2025/01/04
Vietnam stock market set to accelerate in 2025: Experts
Stable macroeconomic fundamentals, ongoing institutional reforms, and favorable monetary policies will be positive for corporate earnings.
16:31, 2025/01/02
Vietnam stock market aims for emerging status by 2025: Finance minister
By the end of 2024, the benchmark VN-Index reached 1,266.78 points, up 12.11% from 2023.
15:33, 2025/01/02
Vietnam set to extend VAT cut for six months
This measure is expected to accelerate the recovery of production and business activities, which will ultimately benefit the state budget and the economy as a whole.
21:29, 2024/12/31
Vietnam’s credit growth projected to expand by 16% in 2025
Growth must put operational safety first, and channel credit to productive business sectors, priority areas, and growth-driving industries.
22:02, 2024/12/17
Regional, international financial centers mean boosters to Vietnamese economy: Deputy PM
Ho Chi Minh City envisions its financial center encompassing the money market, banking system, capital market, and derivatives market.
15:44, 2024/11/14
IFC sets record with US$1.6 in climate financing to support Vietnam’s green transition
The new commitments aim to bolster Vietnam's shift towards a low-carbon economy while enhancing private-sector resilience and competitiveness.
- Vietnam's credit growth up 10% in 10 months
- Building Hanoi's smart city with smart banking
- Vietnam stock market clears major legal hurdle to potential upgrade
- Cashless parking in Hanoi: Good model fuels smart transport
- Banking sector dominates Vietnam’s corporate bond market
- Prime Minister expects lending to grow by 15% this year