Allowing the exchange of bonds for products like real estate or other assets is unprecedented in Vietnam. (Photo: VietnamPlus) Hanoi (VNA) - 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.
The decree dated March 5, 2023 aims to amend a number of articles in the decrees regulating the private placement of corporate bonds for sale and transactions in the domestic market and the sale of corporate bonds in the international market. By the end of November, 77 enterprises had issued bonds totaling around 220 trillion VND (9.063 billion USD).
Nguyen Hoang Duong, Deputy Director General of Department of Banking and Financial Institutions under the Ministry of Finance, said after the issuance, businesses and bondholders have made great efforts to negotiate the settlement of maturing bonds. Currently, negotiation plans have been in place for about 40% of the overdue bond volume of 68 enterprises, with the successful negotiation rate increasing from 16% in February to 63% in October. Furthermore, financially prepared enterprises have proactively repurchased bonds before maturity.
Market associations and participants highly appreciate the decree, which is timely and provides a framework for investors and businesses to negotiate, allowing them more time to restructure their current debts, Duong elaborated.
Echoing the view, Can Van Luc, Chief Economist at the Bank for Investment and Development of Vietnam (BIDV), also believes that Decree No. 08 has addressed obstacles with more favorable conditions than before. This unprecedented policy allows for the postponement and rescheduling of bond debts and exchange of bonds for goods.
Currently, investors have rights and ability to fully access all the information they want on the centralised trading system. (Photo: VietnamPlus) General Director of the Hanoi Stock Exchange (HNX) Nguyen Anh Phong said the separate trading system for corporate bonds has achieved remarkable results. On July 19, the first day of trading – 19 bonds from three participating enterprises were registered. To date, the market has had 760 bonds from over 200 registered firms. Thus, about two-thirds of the numbers of enterprises and bonds in the market have been registered on the centralised trading system.
Regarding the trading scale, Phong held that the market has experienced growth after five months. "This is a very positive signal for liquidity in the market, contributing positively to the primary market," he said.
Praising the Ministry of Finance for promptly launching the secondary market for corporate bonds, Nguyen Ngoc Anh, Chief Executive Officer (CEO) of the SSI Asset Management Ltd. expressed that the move is great for rebuilding the trust of investors and the market.
"The operation of this secondary market plays a very important role in bringing transparency to the market, especially for individual investors," she said.
The Ministry of Finance will base its specific solutions on the guidance in the Prime Minister's Dispatch No. 1177/CD-TTg. (Photo: VietnamPlus) From the perspective of state management agencies, Duong acknowledged that the corporate bond market is achieving the dual goals as directed by the Prime Minister.
On the other hand, the official believes that the most important thing is still the need for comprehensive solutions in terms of macroeconomics and related markets such as the real estate and credit markets.
According to Duong, the Ministry of Finance will continue to monitor enterprises with bond debts in 2023. Additionally, the body will base its specific solutions on the guidance in the Prime Minister's Dispatch No. 1177/CD-TTg to implement specific measures to promote the transparent development of the market in the time to come./.
