Prospects for credit growth and exchange rates will create favourable conditions for non-bank corporate bonds to recover in the final months of this year, analysts forecast.
The Vietnamese real estate market is signalling the end of a prolonged downturn, with notable signs of recovery in profitability. However the pace of revival remains measured, due to sluggish sales and limited improvements in consumer incomes.
Analysts predict peak bond maturity pressure in the fourth quarter of this year, with the real estate sector facing the most significant burden at over 43% by October 4.
Do Anh Dung, Chairman of Tan Hoang Minh Group, saw his sentence reduced from eight to seven years in prison by the High-level People's Court in Hanoi during an appeal hearing on September 25.
Companies issued 161.5 trillion VND (6.43 billion USD) worth of bonds during January-July, or 2.6 folds higher than the same time last year, the Ministry of Finance (MoF) said on August 5.
The State Bank of Vietnam (SBV) has decided to allow commercial banks to reschedule the debt repayment period and maintain the debt group for certain sectors for an additional six months, to support struggling businesses.
The outstanding bonds of real estate enterprises totalled 350.88 trillion VND (13.79 billion USD) as of the end of March, according to a recent report of the Ministry of Finance (MoF).
The volume of corporate bonds maturing in 2024, though lower than that in 2023, is till at a high level, mostly in industries with payment risks such as real estate and renewable energy, according to a report by the Ministry of Finance (MoF).
The pressure of corporate bonds maturing in 2024 remains significant, with many businesses needing to pay trillions of Vietnamese dong in bonds that are due for investors.
The market capitalisation of Vietnam’s stock market approximated 6 quadrillion VND (246.7 billion USD) in 2023, rising 9.5% from and equivalent to about 62% of gross domestic product (GDP) in 2022, statistics show.
Vietnam's corporate bonds worth 230.2 trillion VND (nearly 9.5 billion USD) had been redeemed before maturity by December 25, an increase of 5.8% compared to the figure in 2022, according to the Ministry of Finance.
Though the asset quality of banks in Vietnam will be temporarily under control until the end of 2023, experts said more attention should be paid to the issue in 2024 as bad debts are rising.
The market has so far shown more positive signs, and businesses have resumed issuing bonds, following the Government’s issuance of Decree No. 08/2023/ND-CP in March.
Total corporate bonds set to mature in 2024 will reach 329.5 trillion VND (13.5 billion USD), the highest in three years, according to a report by the Ho Chi Minh City Real Estate Association (HoREA).
Over 209.15 trillion VND (over 8.61 billion USD) was raised from the issuance of corporate bonds in the first 10 months of 2023, according to data compiled by the Vietnam Bond Market Association (VBMA) from the Hanoi Stock Exchange (HNX) and the State Securities Commission (SSC).
After more than two months of operation of the trading platform for privately placed corporate bonds, another 56 corporate bond codes were registered to be traded on the system last month, with the transaction value doubling that of August, said the Hanoi Stock Exchange (HNX).
Despite strong efforts and more positive signals recorded, Vietnam’s economic growth stood at only 3.72% in the first half of 2023, putting heavy pressure on the realisation of this year’s GDP growth target of 6.5%, said Deputy Minister of Planning and Investment Tran Quoc Phuong.
More companies reported delaying paying principal and interest on bonds in the second quarter, with a total outstanding payment of nearly 24.3 trillion VND (1.02 billion USD) due, according to a report on corporate bonds from MBS Research.
In the first half of this year, Vietnam enjoyed positive economic recovery of the industry, construction, and service sectors, giving reasons for optimism on the economic outlook for the rest of the year.