Non-bank corporate bonds forecast to recover in year-end months
The primary corporate bond market in September recorded a total issuance value of VNĐ45.3 trillion. Photo cafef.vn |
Under an October 2024 corporate bond market report released recently, analysts of the rating agency FiinRatings said that the US Federal Reserve (Fed)'s first interest rate cut in four years was a positive sign for the Vietnamese exchange rate, after the State Bank of Vietnam (SBV) continuously sold the US dollar due to high capital withdrawal demand.
At the same time, the SBV also stopped net withdrawal through the treasury bill channel after the bidding session on August 23, 2024.
FiinRatings’ analysts predict that the domestic exchange rate pressure will decrease, which will create favourable conditions for the SBV to buy the dollar to increase the nation’s foreign exchange reserves.
According to FiinRatings, the decrease in dollar interest rates will support international borrowing costs. Enterprises that do not hedge will benefit as the decrease in dollar interest rates will directly reduce loan interest rates.
Lower exchange rates also facilitate upcoming international borrowing or bond offerings.
In addition, FiinRatings’s analysts said, credit is on track to recover until the end of this year thanks to the corporate customer segment.
However, the analysts note that credit growth quality needs to be focused on. Banks’ outstanding loans at the end of September 2024 increased by 8.53 per cent compared to the beginning of this year, but was mainly driven by the corporate customer segment in the context of weak personal consumption demand.
"The ability to achieve the SBV's credit growth target by the end of this year will depend on the recovery of the real estate, energy and export sectors. However, as the credit growth has focused on the corporate customers, especially the real estate one, the quality of credit growth also requires due attention to avoid causing rising bad debt, which will increase risks for the banking system," FiinRatings’ analysts noted.
According to the report, the primary corporate bond market in September recorded a total issuance value of VNĐ45.3 trillion, with 39 issuances, down 27.5 per cent compared to the previous month but up 20.8 per cent compared to the same period last year.
The total bond issuance value in the first nine months of this year reached VNĐ313.6 trillion, recording an increase of 57.9 per cent compared to the same period last year.
Private and public issuance activities both recorded growth of 62.0 per cent and 28.1 per cent respectively over the same period last year. The rise shows the rapid recovery of this market.
However, according to FiinRatings, there has not been a clear recovery from the group of non-bank issuers. The majority of issuances in September 2024 and in the first nine months of this year were still from credit institutions, accounting for 82.9 per cent and 74 per cent of the total value of new corporate bonds, respectively.
Meanwhile, the issuance value of the non-bank group in September only reached VNĐ5.4 trillion, bringing the total issuance value in the first nine months of this year to VNĐ80 trillion, down 26.3 per cent compared to the same period last year.
Related News
Latest News
Budget revenue is about to be completed for the whole year estimate
08:34 | 13/11/2024 Finance
Tax authorities and Police join forces to crack down on e-invoice fraud
14:14 | 12/11/2024 Finance
State revenue collection poised to surpass annual target
10:11 | 12/11/2024 Finance
Amending regulations for proactive, responsible tax officials
08:55 | 11/11/2024 Finance
More News
Drastic actions taken to complete 95% public investment disbursement goal: Gov’t press conference
20:07 | 10/11/2024 Finance
Revising policies to adapt to two-way impact of FTAs
09:24 | 10/11/2024 Finance
Deputy Prime Minister, Minister of Finance: Budget management to be more decentralized
09:22 | 10/11/2024 Finance
Amend regulations on “Public-Private Partnership” (PPP) and “Build Transfer” (BT) investment: Fully calculating to avoid loss of state assets
14:23 | 09/11/2024 Finance
Public investment disbursement reaches 52.2% in ten months
15:17 | 08/11/2024 Finance
State budget revenue for 2024 nears target
10:06 | 08/11/2024 Finance
Public investment spending up 1.8% in first 10 months of 2024
10:03 | 08/11/2024 Finance
Propose many solutions to shorten tax refund time
09:32 | 07/11/2024 Finance
Finance sector exceeds revenue target in 4 years thanks to comprehensive reform of collection method
09:30 | 07/11/2024 Finance
Your care
Budget revenue is about to be completed for the whole year estimate
08:34 | 13/11/2024 Finance
Tax authorities and Police join forces to crack down on e-invoice fraud
14:14 | 12/11/2024 Finance
State revenue collection poised to surpass annual target
10:11 | 12/11/2024 Finance
Amending regulations for proactive, responsible tax officials
08:55 | 11/11/2024 Finance
Drastic actions taken to complete 95% public investment disbursement goal: Gov’t press conference
20:07 | 10/11/2024 Finance