Synchronous solutions to regain stability for the corporate bond market

VCN - At the Government press conference on the afternoon of December 1, responding to the press about solutions to ensure investors' interests related to corporate bonds, Deputy Minister of Finance Nguyen Duc Chi emphasized the need for a synchronous solution to help investors regain trust, and return to the market.
Deputy Minister of Finance Nguyen Duc Chi spoke to the press. Photo: VGP
Deputy Minister of Finance Nguyen Duc Chi spoke to the press. Photo: VGP

The corporate bond market

Accordingly, the Deputy Minister of Finance acknowledged that the current situation is indeed difficult for the corporate bond market, especially the privately issued corporate bonds.

A manifestation of this situation, according to Deputy Minister Nguyen Duc Chi, by November 25, 2022, the issuance volume tended to decrease, reaching only VND331.8 trillion, down 31.6% over the same period last year, especially gradually decreasing over the quarters.

Meanwhile, there is a phenomenon of early redemption, that is, when the bond has not expired yet, the issuer buys it back or the investor proposes to buy it back.

In addition, according to a leading representative of the Ministry of Finance, by November 25, 2022, the pre-maturity repurchase volume of enterprises is VND161 trillion, equal to 114% of the repurchase volume in 2021.

Talking about market confidence, Deputy Minister Nguyen Duc Chi said that the assessments showed that the market's confidence decreased, greatly affecting the corporate bond market.

Therefore, the Deputy Minister has specifically analyzed a number of reasons. First, there are a number of violations from the issuer to the commercial bank that we must consider and handle. These violations have affected the confidence of the market, the trust of investors, consulting firms and the issuers themselves.

The second is caused by the influence of inaccurate rumors. At a recent Government press conference, Deputy Minister Nguyen Duc Chi said that he had also reported this issue and asked the Ministry of Public Security and the press for help. Immediately after that, the Ministry of Public Security handled a number of cases, and the press also contributed a lot to limiting false rumors that affected the market's confidence.

Moreover, the issuers are facing difficulties in liquidity, cash flow and credit. The real estate market is also difficult, and real estate businesses are also facing difficulties in issuing bonds.

"These difficulties have affected the market,” the Deputy Minister of Finance stated.

Protect the legitimate interests of investors

Talking about solutions to stabilize and develop, and ensure the legitimate interests of investors, Deputy Minister Nguyen Duc Chi said that the Ministry of Finance has identified several groups of reasons and solutions.

In particular, regarding the legal framework, the Government, after reviewing and evaluating, issued Decree 65 amending and supplementing a number of contents of Decree 153 on transactions and private placement of corporate bonds. The Deputy Minister assessed that the issuance of Decree 65 has promptly enhanced the publicity and transparency of the market, dealt with inadequacies as well as protected the interests of investors.

However, the market situation has changed extremely rapidly in recent months, so the Prime Minister has very clearly directed to review immediately, including Decree 65 recently issued, to proceed immediately with amendments and supplements to help the market.

Therefore, implementing this direction, the Deputy Minister of Finance said that the Ministry is urgently submitting to the Government and the Prime Minister legal issues related to Decree 65 and related regulations, in its competence, to consider and settle in December.

In actual implementation, on November 23, the Minister of Finance held a face-to-face meeting with 37 companies issuing individual corporate bonds, having large issuance scale and issuance volume, with expiry period in the last 2 months of 2022 and 2023.

Along with that, there are nearly 10 securities companies with a large market share of government bond issuance.

Thereby, the Ministry of Finance listened to the recommendations and proposals of businesses as well as consulting companies. Some recommendations focus on encouraging early restoration of confidence in the market; removing difficulties in liquidity and credit of enterprises from credit institutions; and completing the legal framework.

Therefore, the Ministry of Finance has sent a document to all bond issuers and requested that businesses must prioritize using all their resources to fulfill their commitments to investors. In case there are difficulties in paying the bond principal and interest, it is necessary to have a plan to reach an agreement with investors.

"Enterprises must be proactive and responsible by all means, at all costs, to the best of their ability with investors," Deputy Minister Nguyen Duc Chi emphasized.

In addition, the Ministry of Finance recommends that enterprises must comply with the information disclosure regime as prescribed, and proactively provide information about enterprises to investors. Enterprises can hire consulting firms, including independent audit, credit rating, valuation, etc to determine the value of the business, helping investors understand the current situation of the business. If any business violates the law, state management agencies will strictly handle it, helping to protect the legitimate interests of investors in any circumstances as the Prime Minister said in the media conference.

Along with the above tasks, the representative of the leadership of the Ministry of Finance said that they will implement other solutions related to the relevant agencies of the Government such as the State Bank, the Ministry of Construction, and the Ministry of Information and Communications.

“In order to ensure the best interests of investors, issuers must fulfill their obligations. To do that, it is necessary to implement solutions to bring the bond market back to normal operation. At that time, both the interests of businesses and investors will be fully and seriously implemented, and we will have a market that continues to be stable and develop safely," said the Deputy Minister of Finance.

Also on this issue, Minister and Chairman of the Government Office Tran Van Son emphasized legal solutions and amendments to the law on securities business, enterprises, to encourage the development of investing corporate bonds more professionally.

By Huong Diu/Phuong Linh

Related News

Vietnam secures VND 157 billion from state enterprise divestment in 2024

Vietnam secures VND 157 billion from state enterprise divestment in 2024

VCN - The Ministry of Finance reported that in 2024, the divestment of state capital in 5 enterprises (F1) generated VND 157 billion from an initial value of VND 145 billion
Focusing on inspecting inventory of public assets at units with large and complex assets

Focusing on inspecting inventory of public assets at units with large and complex assets

VCN - According to Official Dispatch No. 1456/BTC-QLCS on inspecting the preparation and implementation of the General Inventory of Public Assets recently issued by the Ministry of Finance, the inspection of the inventory of public assets focuses on units with large asset scale and large number of inventory items, complex assets, and slow implementation progress.
Vietnam gears up for potential inflation impact in 2025

Vietnam gears up for potential inflation impact in 2025

VCN - For sound price management and inflation control, Deputy Prime Minister Ho Duc Phoc directed officials to vigilantly track both domestic and international market dynamics. The goal is to proactively develop flexible strategies and solutions, enabling a swift response to any emerging challenges.
Director General Nguyen Van Tho: streamlining apparatus to meet the requirements of customs modernization

Director General Nguyen Van Tho: streamlining apparatus to meet the requirements of customs modernization

VCN - Director General of the General Department of Customs Nguyen Van Tho said that the customs sector will focus on arranging and streamlining the apparatus, ensuring that the new apparatus can be put into operation immediately, without interruptions.

Latest News

Personal income tax proposed for interest on some bank savings accounts

Personal income tax proposed for interest on some bank savings accounts

Instead of the current personal income tax exemption on interest from all individual bank savings accounts, the proposal would exempt tax only for low amounts of savings.
Banks set for aggressive bond issuance in 2025 to fuel growth

Banks set for aggressive bond issuance in 2025 to fuel growth

With a higher credit growth goal set by the SBV, banks are ramping up their efforts to secure funding through bond issuance.
Central bank cuts interest rate on bills for first time in 2025

Central bank cuts interest rate on bills for first time in 2025

According to data from the financial data provider Wichart, the SBV issued VNĐ19.6 trillion of bills in the past week. The interest rate on the bills decreased by 0.1 percentage point, from 4 per cent to 3.9 per cent on February 14.
The government seeks approval for revised GDP, CPI targets

The government seeks approval for revised GDP, CPI targets

VCN - The Government submitted to the National Assembly for consideration and comments on adjusting the target for the growth rate of gross domestic product (GDP) to 8% or more; the average growth rate of the consumer price index (CPI) to about 4.5-5%.

More News

Fiscal, monetary policies support demand stimulation, price stabilisation

Fiscal, monetary policies support demand stimulation, price stabilisation

These efforts, in conjunction with the implementation of monetary policies and other macroeconomic policies, aim to solve difficulties for businesses and the public, stabilise the macroeconomy, control inflation, ensure the balance of the economy, promote economic growth, and secure social welfare and people’s livelihoods.
VN’s credit conditions in 2025 expected to be stable

VN’s credit conditions in 2025 expected to be stable

The credit conditions for Việt Nam will stabilise in 2025, after improving substantially over the past year, the rating agency VIS is forcasts.
State revenue in first month of the year equal to 14% of the estimate

State revenue in first month of the year equal to 14% of the estimate

VCN - According to the Ministry of Finance, in January - the first month of 2025, the total state budget revenue is estimated at VND275.9 trillion, equal to 14% of the estimate; meanwhile, the total state budget expenditure is estimated at VND134.4 trillion.
Securities 2025 expects a breakthrough in scale and quality

Securities 2025 expects a breakthrough in scale and quality

VCN – The positive factors inherent in the macro economy and the Vietnamese stock market will continue to create the foundation for the market to maintain stability, good liquidity, and growth in both scale and quality in the new year of At Ty 2025, Chairwoman of the State Securities Commission Vu Thi Chan Phuong said.
Cash reserves in stock accounts at six-quarter low amid margin rise

Cash reserves in stock accounts at six-quarter low amid margin rise

These funds are readily available in investor accounts, but remained undeployed as of the year-end.
Five solutions for developing stock market in 2025

Five solutions for developing stock market in 2025

VCN - On February 5, 2025, at the Gong-beating ceremony to open the stock trading at the Ho Chi Minh City Stock Exchange (HOSE), Deputy Minister of Finance Nguyen Duc Chi introduced five solutions for comprehensive development of the stock market.
Minister of Finance Nguyen Van Thang works with GDVC at the first working day after the Tet holiday

Minister of Finance Nguyen Van Thang works with GDVC at the first working day after the Tet holiday

VCN- On February 3, the first working day after the Tet holiday, Minister of Finance Nguyen Van Thang and the delegation visited and worked with the General Department of Vietnam Customs (GDVC).
The stock market after Tết 2025 presents both challenges and opportunities

The stock market after Tết 2025 presents both challenges and opportunities

Việt Nam’s stock market following the 2025 Lunar New Year (Tết Nguyên Đán) presents a complex landscape of risks and potential gains, driven by foreign capital inflows, economic resilience, and looming corporate bond maturity pressures, according to one securities expert.
Opportunities and challenges in Việt Nam

Opportunities and challenges in Việt Nam's crypto boom

Việt Nam boasts one of the most active investment communities in the cryptocurrency sector. However, protecting investors and promoting sustainable growth requires a robust legal framework.
Read More

Your care

Latest Most read
Personal income tax proposed for interest on some bank savings accounts

Personal income tax proposed for interest on some bank savings accounts

Instead of the current personal income tax exemption on interest from all individual bank savings accounts, the proposal would exempt tax only for low amounts of savings.
Banks set for aggressive bond issuance in 2025 to fuel growth

Banks set for aggressive bond issuance in 2025 to fuel growth

With a higher credit growth goal set by the SBV, banks are ramping up their efforts to secure funding through bond issuance.
Central bank cuts interest rate on bills for first time in 2025

Central bank cuts interest rate on bills for first time in 2025

According to data from the financial data provider Wichart, the SBV issued VNĐ19.6 trillion of bills in the past week. The interest rate on the bills decreased by 0.1 percentage point, from 4 per cent to 3.9 per cent on February 14.
Focusing on inspecting inventory of public assets at units with large and complex assets

Focusing on inspecting inventory of public assets at units with large and complex assets

VCN - According to Official Dispatch No. 1456/BTC-QLCS on inspecting the preparation and implementation of the General Inventory of Public Assets recently issued by the Ministry of Finance, the inspection of the inventory of public assets focuses on units
The government seeks approval for revised GDP, CPI targets

The government seeks approval for revised GDP, CPI targets

The Government submitted to the National Assembly for consideration and comments on adjusting the target for the growth rate of gross domestic product (GDP) to 8% or more
Mobile Version