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Strengthen the system proportionally

11:57 | 09/06/2021

VCN - The corporate bond market report of the first quarter of 2021 of SSI Securities Company said that the total amount of corporate bonds issued in the first quarter of 2021 was VND37,400 billion, down 23.9% compared to the previous quarter last year.

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According to experts, this sharp decline is due to the influence of a series of new regulations in the direction of tightening corporate bond issuance, which will take effect from the end of 2020 and the beginning of 2021. Including Decree 81/2020/ND-CP amending and supplementing a number of articles related to the issuance of corporate bonds and the enforcement effect of the Law on Securities, the Law on Enterprises, etc.

However, the problem is that according to the above report, in the first quarter of 2021, VND15.3 trillion of unsecured corporate bonds (accounting for 41%); VND3.4 trillion of corporate bonds (accounting for 9.2%) whose collateral is entirely stocks. SSI's report also forecasts that bond issuance will increase in the second quarter because the first quarter is the low point for issuance due to the Lunar New Year is the period to develop business and financial plans.

Besides, real estate businesses are still the largest issuers and the issuance interest rates may increase.

While real estate credit at the end of the first quarter of 2021 reached VND1.85 trillion, up 3% compared to the end of 2020 and higher than the overall growth rate of the whole industry (2.93%).

Therefore, the State Bank recently warned that investment in corporate bonds for the purpose of real estate construction and trading still accounts for a high proportion of total investment in corporate bonds. Some commercial banks have a large increase in corporate bond investment balance compared to 2019, of which, the increase mainly focuses in the field of construction and real estate.

Currently, the real estate market is quite hot, so problems such as the amount of unsecured bonds or backed by stocks can increase risk for investors. The financial market consists of three main pillars: the bank credit market, the stock market and the bond market. If one of these is shaken, the whole system can be affected.

Therefore, we need to continuously strengthen and perfect the system of operational management policies commensurate with the development scale of the corporate bond market. Moreover, businesses operating in the bond market also need to comply with the law, for the general development of the economy.

By Binh Nam/Phuong Thao