Two traders at the trading floor of DSC Securities Co in Hanoi. (Photo: VNA) According to Dinh Trong Thinh, Senior Lecturer of the Academy of Finance, the separate bond trading system is necessary and should have been implemented earlier. Privately-placed bonds need a separate trading market, which allows bondholders who do not want to hold bonds for a long time to sell them to others.
This will help the bonds circulate easily and the bonds will be valued more accurately, and at the same time, their safety will be more assured, he said.
According to Nguyen Ba Khuong, an analyst from VNDIRECT Securities Joint Stock Company (VNDIRECT), private placement is still quiet.
According to VNDIRECT, in the second quarter of 2023, there were 29 successful domestic corporate bond issuance tranches, with a total issuance value of about 19.28 trillion VND, down 34.4% compared to the first quarter of 2023, and down 83.1% over the same period last year; in which there were 28 tranches of private placement with a total issuance value of 17.28 trillion VND, accounting for 89.6% of the total issuance value.
There was only one tranche where bonds were issued to the public with the issuance value of 2 trillion VND, accounting for 10.4% of the total issuance value in Q2.
Accumulated in the first six months of 2023, the total issuance value reached about 48.69 trillion VND, down 73.3% compared to the same period last year; in which, the total value of private placements reached 42.78 trillion VND, down 75.6% over the same period last year, the total value of public issuance reached 5.9 trillion VND, down 15.9% year-on-year.
Real estate was the industry group with the largest proportion of corporate bond issuance in the second quarter of 2023 when accounting for more than 34.9% of the total issued value, followed by the banking group, accounting for 29% of the total issued value. The group of multi-industry groups and the logistics group accounted for 10.4% and 8.5%, respectively, and other industries accounted for 17.2%.
Enterprises with the largest private bond issuance value in the second quarter of 2023 include Nui Phao Mineral Exploitation and Processing Limited Liability Company issuing 2.6 trillion VND, with an interest rate of 9% per year and term of 60 months; Construction Business Development Company Limited 3 issuing 2.25 trillion VND with the interest rate of 14% per year for a term of 60 months.
The TMT Real Estate Development Investment Joint Stock Company issued 2.01 trillion VND of bonds with interest rate of 13.75% with a term of 84 months, the HCM City Development Commercial Joint Stock Bank issued 2 trillion VND of bonds, with an interest rate of 9.1% for an 84-month term.
Private placement in the second quarter of 2023 was quiet, said VNDIRECT Securities Co.
VNDIRECT said that investors' confidence had not improved in the context that many issuers are facing cash flow difficulties, leading to late payment of due bond debts.
According to the MB Securities Joint Stock Company (MBS), the poorly-performing real estate and corporate bond markets will create a bottleneck for the capital flow of the economy, causing investment to shrink, slowing down the economic growth.
According to VNDIRECT, as of June 26, about 59 enterprises on the HNX were on the list of late payment of interest and principal debt of corporate bonds, according to the announcement of HNX.
VNDIRECT estimated that the total outstanding debt of these enterprises reached 159.5 trillion VND, accounting for about 14.6% of the total outstanding corporate bond debt in the market.
In fact, after the incident at Tan Hoang Minh, Van Thinh Phat and a series of large enterprises failed to pay bond principal and interest on time, investors have gradually lost confidence in the market.
Therefore, operating a secondary trading floor of corporate bonds would make many bondholders feel secure, said bond investor Nguyen Van Hanh.
According to Deputy General Director of the Vietnam Construction Securities Joint Stock Company (CSI), Do Bao Ngoc, the Vietnamese bond market lacks a centralised secondary trading market and this market should have been in operation a long time ago.
He said that the operation of this bond market would be a factor in the development of the Vietnamese market in the long term, making the liquidity of bond transactions increase.
The floor would be a professional and effective capital mobilisation channel.
“We gradually have a more professional financial system, thereby attracting more foreign capital,” Ngoc said.
The separate bond trading system must operate safely and efficiently, in line with international practices and meet the requirements of future development of the corporate bond market.
According to Director of the Market Development Department, State Securities Commission, Ta Thanh Binh, when the market is in place, member securities companies will monitor the participation of investors more effectively.
The new secondary bond market increases corporate bond transparency and increases access from issuers to investors, thereby improving payment quality and minimising risks for investors./.
VNA
