Issuance of corporate bonds shows signs of recovery

VCN - In the first half of the year, the volume of newly issued bonds showed signs of recovery from the second quarter after Decree 08 took effect. After the moves to purify the corporate bond market in 2022, the restructuring and making the market transparent, and regaining investors' trust will still be a priority in the long-term policy. And this started with the launch of a private corporate bond trading system on the HNX.
Payment of bonds by Payment of bonds by "barter agreement": is it difficult or easy?
Trading floor of corporate bonds satisfies conditions for official operation Trading floor of corporate bonds satisfies conditions for official operation
Running private placement bond exchange: A big step forward in corporate bond market transparency Running private placement bond exchange: A big step forward in corporate bond market transparency
The private corporate bond exchange is officially launched on July 19, 2023. Photo: Collected
The private corporate bond exchange is officially launched on July 19, 2023. Photo: Collected

Showing signs of recovery in some specific groups

Commenting on the corporate bond market in the first six months of 2023, SSI Securities Joint Stock Company said that the issuance of Decree 08/2023/ND-CP has provided a suitable legal corridor for the extension/ suspension of payment of bond principal/interest and this has helped the issuance in the primary market to be somewhat more active.

Volume of newly issued bonds showed signs of recovery from the second quarter after Decree 08 took effect. By sector, real estate took the lead and accounted for 57% of total issued volume, followed by banks with 31%. Enterprises tended to focus on negotiating the extension/ suspension of debt payment with bondholders rather than accelerating acquisitions as seen at the end of 2022.

Total issued bond volume reduced in the first quarter of 2023 but showed signs of recovery in the second quarter. The VND57.3 trillion worth of privately corporate bonds were released in the first six months of 2023, down 67.8% year-on-year. Meanwhile the volume of public offerings only reached VND 5.5 trillion, down 37.9% year-on-year.

It is worth noting that bonds of real estate enterprises accounted for the highest rate (57%) in the primary market but only focused on a few issuers. Banks boosted issuance from the second quarter and accounted for 31% of the total issued volume because they had solved problems in the audit report on disbursement of bond funds.

According to SSI, after the Van Thinh Phat incident at the end of 2022, the bond acquisition activity of real estate enterprises took place quite strongly, but has slowed down since Decree 08 was issued.

Specifically, bond acquisition activity of real estate enterprises decreased to VND 24.7 trillion in the second quarter of 2023 from a peak of VND 34.8 trillion in the fourth quarter of 2022.

“We also saw the bank accelerate bond bond acquisition in the second quarter, mainly related to the term structure for the purpose of raising Tier 2 capital.”

The secondary corporate bond exchange will help demand for corporate bond recover

The most notable information in the corporate bond market in the recent times is the launching of the secondary private corporate bond exchange from July 19, 2023. All in all, this is a good start, but only by keeping a good liquidity scale with lots of traded bonds can maintain existing benefits of the secondary exchange to the market.

According to SSI's estimates, there will be a total of VND 733 trillion of bonds or 455 issuers to register on HNX within three months from July 19, 2023. To date, only 19 codes issued from Tracodi, Vietcombank and Vinfast have been registered with a total value of VND9 trillion.

The primary benefit of a secondary exchange is transparency. Previously, although issuers were obliged to report information on issuances to HNX, the access to information about issuance such as issuance purposes, collateral assets, and interest rates or the depository participating institution, or information about the remaining outstanding balance of corporate bonds or the financial situation of the issuer is quite difficult. In addition, secondary transactions and monitoring of money flows on the secondary market are nearly impossible due to the lack of a public market. As a result, this exchange can provide investors with easier and more formal access to research and track the yield curve/price movement, especially for unlisted issuers.

Besides, in an efficient market, the transactions of buyers and sellers on the secondary market will determine the trend of bond yields and will serve as directional indicators to identify risks of the issuer's financial health or macro fluctuations in the market.

Handling bonded debt by real estate will speed up the settlement of bad debt Handling bonded debt by real estate will speed up the settlement of bad debt

VCN – One of the most important points of Decree 08/2023/NĐ-CP amendments to some articles of decree ...

“With all of the above benefits, we assess that the launching of a secondary corporate bond exchange will help the demand for corporate bonds recover, first of all from institutional investors with abundant capital and high demand of investment portfolio diversification. For individual investors, perhaps there is still more work to be done to regain investment confidence and sentiment," said SSI.

By Hoai Anh/ Huyen Trang

Related News

Expanding the Indonesian market with "Halal certification"

Expanding the Indonesian market with "Halal certification"

VCN - The challenge of Vietnamese businesses when accessing Indonesia's Halal market is largely that businesses do not understand the Muslim country's consumer culture.
Coffee export is forecast to continue to win big

Coffee export is forecast to continue to win big

VCN - After reaching a record in price and export turnover, the coffee industry continues to have high expectations for the coming crop year thanks to favourable factors from the market as well as the industry's efforts in promoting processing and meeting new EU regulations.
To achieve growth goals, businesses must "suffer" restructuring

To achieve growth goals, businesses must "suffer" restructuring

VCN - To achieve socio-economic goals in 2024, Prof.Dr. Hoang Van Cuong (photo), Hanoi National Assembly delegate, Vice Rector of the National Economics University, Member of the National Assembly's Finance and Budget Committee emphasized the work of restructuring businesses, even businesses must endure " one-time pain to innovate and recover.
Textile and garment exports are expected to reach 40.3 billion USD

Textile and garment exports are expected to reach 40.3 billion USD

VCN - Textile and garment exports for the whole year are expected to earn 40.3 billion USD. The industry's export target for 2024 is 44 billion USD.

Latest News

Fiscal policy maintains and ensures national financial security

Fiscal policy maintains and ensures national financial security

VCN - At the 2023 Financial Forum, speaking at the session "Financial policy overcomes challenges to promote economic growth and development", Regional Resident Representative for Vietnam, Cambodia, Lao PDR, Jochen Schmittmann believes that tax incentives are only a secondary factor in attracting investment and the global minimum tax is an important initiative to avoid a "race to the bottom" on preferential tax rates among countries in attracting foreign investment.
Flexibly adjust financial policies to effectively mobilize and allocate resources for socio-economic development

Flexibly adjust financial policies to effectively mobilize and allocate resources for socio-economic development

VCN - In the coming time, Vietnam will face risks and challenges due to decline in the global growth. In addition, internal challenges will also create pressure on the domestic economic recovery and growth process. This requires the financial policies to be flexibly adjusted to effectively mobilize and allocate resources for sustainable socio-economic development, Deputy Minister of Finance Cao Anh Tuan stated at the opening of the 2023 Financial Forum.
Many information channels to listen to clients

Many information channels to listen to clients' opinions about the State Treasury

VCN - The result of the satisfaction level of individuals and organizations about the services of the State Treasury is always high, showing that the State Treasury does not only drastically implements administrative procedure reform but also creates many Information channel to listen, capture information and recommendations from clients.
122 foreign corporations investing in Vietnam have to pay Global minimum tax

122 foreign corporations investing in Vietnam have to pay Global minimum tax

VCN – On November 29, the National Assembly approved a Resolution on the application of additional corporate income tax under regulations on global anti-tax base erosion. About 122 foreign businesses in Vietnam will be affected by the Qualified Domestic Minimum Top-up Tax (QDMTT) and will have to pay the additional tax, worth an estimated VND14,600 billion.

More News

Issuing resolution on global minimum tax to proactive international integration

Issuing resolution on global minimum tax to proactive international integration

VCN - The National Assembly officially passed a Resolution on applying additional corporate income tax (CIT) according to global anti-base erosion rules. Many experts and National Assembly (NA) delegates agree with Vietnam’s application of the global minimum tax from the beginning of 2024.
Transactions worth from 400 million VND must be reported to state bank from Dec 1

Transactions worth from 400 million VND must be reported to state bank from Dec 1

Transactions with a value of 400 million VND (16,520 USD) or more must be reported to the State Bank of Vietnam (SBV) from December 1, according to a new decision issued by the Prime Minister.
Continue to improve policy mechanisms to develop the corporate bond market

Continue to improve policy mechanisms to develop the corporate bond market

VCN - On the afternoon of November 28, Deputy Minister of Finance Nguyen Duc Chi chaired a meeting with ministries, central agencies, associations and businesses to get opinions, evaluate the implementation of Decree No. 08/2023/ND -CP and orient policy in the coming time.
The Tax industry has comprehensive digital transformation

The Tax industry has comprehensive digital transformation

VCN - The application of information technology (IT) over the past 30 years has contributed to building a modern Tax industry that operates effectively, efficiently and successfully implements programs and plans to reform administrative procedures, recognized and highly appreciated by organizations, businesses, individuals and the entire society.
Minister of Finance requests to strengthen inspection and supervision of public service activities

Minister of Finance requests to strengthen inspection and supervision of public service activities

VCN - Minister of Finance Ho Duc Phoc signed and promulgated Directive 03/CT-BTC requiring heads of affiliated and subordinate units to thoroughly implement well the Prime Minister's direction on rectifying and strengthening the inspection, examination and supervision of public service activities.
Assessing one-year implementation of "Strengthening Public Financial Management in Viet Nam” project

Assessing one-year implementation of "Strengthening Public Financial Management in Viet Nam” project

VCN - The Project Steering Committee of the Strengthening Public Financial Management Program, Subprogram 1 with a medium-term vision (Project) under the Strengthening Public Financial Management in Viet Nam program held its third meeting on the afternoon of November 23 to evaluate the performance of one-year implementation of the project and direct an implementation plan in 2024
New circular aims to improve stock market transparency

New circular aims to improve stock market transparency

The Ministry of Finance has issued a new circular which aims to improve stock market transparency in Vietnam. ​
Accelerate tax refunds

Accelerate tax refunds

VCN - Implementing the direction of the Prime Minister and the Minister of Finance in tax refunds, the General Department of Taxation has directed tax authorities at all levels to speed up the progress of tax refund settlement, and at the same time, strongly control implementation to ensure strict tax refund and compliance with the law.
Intensified Deployment of Electronic Invoice Issuance for Each Petroleum Retail Sale

Intensified Deployment of Electronic Invoice Issuance for Each Petroleum Retail Sale

VCN - The Ministry of Finance states that the issuance of electronic invoices for each petroleum retail sale is fully supported by legal grounds. Alongside this, the Tax Department is escalating efforts in advocacy, leadership, directives, and the implementation of electronic invoice usage to enhance understanding among citizens and businesses about the benefits, responsibilities, and effectiveness of electronic invoice utilization. This initiative aims to improve taxpayer compliance with tax law obligations.
Read More

Your care

Latest Most read
Fiscal policy maintains and ensures national financial security

Fiscal policy maintains and ensures national financial security

VCN - At the 2023 Financial Forum, speaking at the session "Financial policy overcomes challenges to promote economic growth and development", Regional Resident Representative for Vietnam, Cambodia, Lao PDR, Jochen Schmittmann believes that tax incentive
Flexibly adjust financial policies to effectively mobilize and allocate resources for socio-economic development

Flexibly adjust financial policies to effectively mobilize and allocate resources for socio-economic development

VCN - Vietnam Financial Forum 2023 with the theme "Financial policies to overcome challenges towards sustainable development" is jointly held by the Ministry of Finance and the German Agency for International Cooperation (GIZ), the European Union (EU), Ge
Many information channels to listen to clients

Many information channels to listen to clients' opinions about the State Treasury

VCN - According to information from the State Treasury, in order to promptly capture information and improve the quality of clients’ service transactions, the State Treasury has diversified information channels.
122 foreign corporations investing in Vietnam have to pay Global minimum tax

122 foreign corporations investing in Vietnam have to pay Global minimum tax

VCN - The Resolution regulates the minimum tax rate specified of 15%.
Issuing resolution on global minimum tax to proactive international integration

Issuing resolution on global minimum tax to proactive international integration

VCN - The National Assembly officially passed a Resolution on applying additional corporate income tax (CIT) according to global anti-base erosion rules. Many experts and National Assembly (NA) delegates agree with Vietnam’s application of the global mini
Mobile Version