Corporate bonds slumped in 2014
Vietnam corporations issued far fewer bonds in 2014, despite the participation of many big companies.
Vietnam corporations issued far fewer bonds in 2014, despite the participation of many big companies.
Total value of corporate bond issues for the whole year reached about 22.922 trillion VND (1.07 billion USD), a year-on-year decrease of 33.4 percent and accounting for less than one percent of the country's GDP, according to the Ministry of Finance's Banking and Financial Institution's data.
Meanwhile, government bond issues climbed 37 percent over 2013, totalling more than 248 trillion VND (11.6 billion USD) last year, equivalent to 6.24 percent of GDP.
Outstanding corporate bonds were a mere 2.5 percent of GDP while the number of government bonds was 12.84 percent.
Many large companies issued big bond issues, such as Vietnam National Coal Mineral Industries Group (Vinacomin), 3 trillion VND (140.2 million USD); Hoang Anh Gia Lai Co (HAG) and Masan Group (MSN), each issuing bonds worth over 2 trillion VND (93.5 million USD), Bank for Investment and Development of Vietnam (BIDV), Kinh Bac City Development Shares Holding Corp (KBC) and HCM City Infrastructure Investment Co (CII), with issues between 1-1.5 trillion VND (46.7-70.1 million USD) on each issue.
Apart from them, many listed companies also issued bonds with smaller sizes from 50-350 billion VND (2.3-16.4 million USD), including Vietnam Electricity Construction Co (VNE), Bac Lieu Fisheries Co (BLF), Ninh Van Bay Travel Real Estate Co (NVT), Hung Vuong Corp (HVG), NBB Investment Corp (NBB), DIC Investment and Trading Co (DIC).
Some planned to make bond offers last year, but have yet to issue, including construction company Tasco Co (HUT) and Transimex-SaiGon Corp (TMS) with an issue value of 100 billion VND (4.7 million USD) each.
Most of these convertible bond issues were private placements to banks and strategic investors with an attractive prices and interest rates. The popular bond terms were often three to five years.
According to analysts at VPBank Securities Co, the slow development of the Vietnamese corporate bond market could be attributed to the underdeveloped secondary bond market and the lack of information from issuers.
In addition, Vietnam does not have recognised independent rating agencies to help investors evaluate the creditworthiness of bond issuers. Other countries in the region, such as Malaysia, Indonesia and Thailand, all have at least one rating company.
However, many analysts believe there are many rooms for the corporate bond market to develop in the future as issuing bonds are still an attractive way for companies to raise capital.-VNA
Total value of corporate bond issues for the whole year reached about 22.922 trillion VND (1.07 billion USD), a year-on-year decrease of 33.4 percent and accounting for less than one percent of the country's GDP, according to the Ministry of Finance's Banking and Financial Institution's data.
Meanwhile, government bond issues climbed 37 percent over 2013, totalling more than 248 trillion VND (11.6 billion USD) last year, equivalent to 6.24 percent of GDP.
Outstanding corporate bonds were a mere 2.5 percent of GDP while the number of government bonds was 12.84 percent.
Many large companies issued big bond issues, such as Vietnam National Coal Mineral Industries Group (Vinacomin), 3 trillion VND (140.2 million USD); Hoang Anh Gia Lai Co (HAG) and Masan Group (MSN), each issuing bonds worth over 2 trillion VND (93.5 million USD), Bank for Investment and Development of Vietnam (BIDV), Kinh Bac City Development Shares Holding Corp (KBC) and HCM City Infrastructure Investment Co (CII), with issues between 1-1.5 trillion VND (46.7-70.1 million USD) on each issue.
Apart from them, many listed companies also issued bonds with smaller sizes from 50-350 billion VND (2.3-16.4 million USD), including Vietnam Electricity Construction Co (VNE), Bac Lieu Fisheries Co (BLF), Ninh Van Bay Travel Real Estate Co (NVT), Hung Vuong Corp (HVG), NBB Investment Corp (NBB), DIC Investment and Trading Co (DIC).
Some planned to make bond offers last year, but have yet to issue, including construction company Tasco Co (HUT) and Transimex-SaiGon Corp (TMS) with an issue value of 100 billion VND (4.7 million USD) each.
Most of these convertible bond issues were private placements to banks and strategic investors with an attractive prices and interest rates. The popular bond terms were often three to five years.
According to analysts at VPBank Securities Co, the slow development of the Vietnamese corporate bond market could be attributed to the underdeveloped secondary bond market and the lack of information from issuers.
In addition, Vietnam does not have recognised independent rating agencies to help investors evaluate the creditworthiness of bond issuers. Other countries in the region, such as Malaysia, Indonesia and Thailand, all have at least one rating company.
However, many analysts believe there are many rooms for the corporate bond market to develop in the future as issuing bonds are still an attractive way for companies to raise capital.-VNA
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