The outstanding value of Vietnam's corporate bond market is currently equivalent to more than 15% of the GDP. (Photo: VNA) He said the launch of this system reflects his ministry’s strong determination to develop the financial and stockmarkets. The system will help State agencies better manage the bond marketwhile people can engage in supervision, thus improving market transparency.
On July 19 – the opening day of the system,19 privately-placed corporate bonds had their registrations approved and were offeredfor transaction. Four bonds with more than 5 million units worth over 1.78trillion VND (74.9 million USD) were traded.
Phoc considered this as a good sign,saying if transparency and safety are ensured, privately-placed corporate bondsare completely able to bring into play their role in mobilising capital forbusinesses.
According to the Finance Ministry,the corporate bond market of Vietnam remains relatively modest compared to othersin the region. Its outstanding value is currently equivalent to more than 15%of the GDP, which is targeted at 20% by 2025 and at least 25% by 2030 under thefinancial strategy.
The minister noted the corporate bond market has developed rather positivelyover the past years. A legal framework has been basically built to facilitatethis market’s development and assist businesses to raise funding for theiroperation.
However, the market’s quality has yet to match its fast growth. Some risks haveappeared and need precise assessment to devise appropriate solutions helpingthe market develop in the right direction and in a safe and sustainable manner.
Therefore, a legal framework and policies for the market are gradually takingshape through the issuance of laws, decrees, and circulars, Phoc went on.
On March 5, the Government released a decree which amended and supplemented some regulations of the previous ones on privately-placed corporate bonds. The new document aims to create alegal corridor for tackling certain short-term difficulties for businesses and, at the same time, guarantee investors’ rights and interest.
According to the Vietnam Bond MarketAssociation, almost no businesses issued bonds in the market in late 2022 andthe first two months of 2023. However, from the time the new decree was released tomid-July, more than 68.5 trillion VND worth of corporate bonds was issued,comprising nearly 9.3 trillion VND via 11 public offerings (13.5%) and 59.2trillion VND via private placements (86.5%).
Deputy Minister of Finance Nguyen Duc Chi held that this was a positive sign showingthe policy’s effectiveness in enhancing businesses and investors’ confidence.
Since the launch of the new decree, marketstakeholders’ awareness has improved substantially while issuers andservice suppliers have also seriously complied with the rules on information provisionfor investors, he said, expressing his hope that the market will developsustainably./.
VNA
